Basics

• Foreign currency trading is among the riskiest investments you can get involved with. Any advice-giving article on currency investing is followed up by a disclaimer stating the high risks of loss involved in this type of investment.
  
  

Marketplace

• Online currency brokers provide platforms through which investors can easily trade in currencies in an almost 24/7 market (major forex markets are open worldwide in a rotating manner). Brokers make money off the spread, or difference between the buy price and sell price, available on a particular currency pair.
  
  

Currency Pairs

• Top forex providers offer 16 or more trading pairs for investment. Each currency has its own acronym and pairs are offered in a format such as USD/JPY. A quote for this trading pair on September 23, 2010, was 84.54. This indicates one U.S. dollar is worth 84.54 yen. Investors "go long" or "buy" if they believe the dollar's value against the yen is going to increase. A "short" or sell on this pair is based on a belief that the dollar is going to decrease against the yen.