Forex (foreign exchange) Trading is trading currencies from different countries against each other, that is, buying one currency using other. It is the process of buying and selling two currencies simultaneously.
You have to choose a currency pair. You can buy Euro by selling USD. For example, if you have purchased 100 Euros for 120 USD in Jan 2011 and if both the Euro vs. USD values increases throughout the year and you choose to end the trade at this point then you would have a $100 gain.
This Forex trading is typically done through a broker. It’s up to you to choose your forex trading broker. Online forex trading is one of the easiest ways to trade which is done with just a few clicks on your computer. Orders you place are passed to an interbank to fill your position. When you choose to close your trade, the broker closes your position on the interbank and your account is either credited with gain or loss. You can choose leading online forex trading brokers like AvaFX which offers a wide range currency pairs but at the same time do some research on whether it is real or scam as there has been rumors of Avafx scam.