Before you try to assess the real benefits that are delivered by the Forex Trading process you must understand what the Forex Market is and what are the basic elements of Forex Trading.

What is Forex?  The Foreign Exchange market, in brief called as the Forex Market is the largest financial market in the world where largest amount of currency exchanges is made.  These transactions are called the Forex Trading.  Overall transactions carried out in the market are around $1.2 trillion per year that is much greater amount compared to the New York stock market.

Major currencies, exchange of which forms the bulk of Forex Trading  in the Forex Market are the US dollar, Euro dollar, Japanese Yen, Swiss Franc, and the British Pound. However, you will not find any central exchange in the Forex Market and in the Forex Trading process.

The most common currency against which the exchanges are made is the US dollar. The major currency pair in the Forex Market are the US dollar combined with Euro dollar, Japanese Yen and Swiss Franc.  Bulk of the Forex Trading is carried out using these currencies in the foreign exchange market. Due to absence of any central exchange in the Forex Market, these currencies are often exchanged using the telephone or other communication methods including email.

Forex Trade however is carried on in the Forex Market through a global network of banks and other financial institutions, and brokers who perform as the currency traders.

The bid price in Forex Trading is the price at which the buyers are willing to buy the currencies while the ask price in the Forex Market refers to the price at which the sellers are willing to sell the currency.  The pip spread in Forex Trading refers to the difference between the bid and ask price.

For example if the British Pound has a bid price of 1.38 US dollars and ask is 1.39 then there is the pip spread of 0.01 or simply 1 in the Forex Market.