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Unlike many other markets, foreign exchange transactions are not actually undertaken on an �exchange� eg stocks and shares are sold via the �London Stock Exchange�. Large foreign exchange transactions are undertaken by Banks and other Market Makers between themselves over the telephone or via an electronic dealing systems. This type of system is often referred to as ��Over the Counter� or OTC and forms the �interbank� market for foreign exchange.

There are two main reasons for buying or selling currency. The first is bought speculatively for trading with a hope of making a profit. This forms a staggering 95% of the market. The second reason is for physical settlement. These are mainly businesses that are buying or selling for the purposes of settling foreign invoices or converting their foreign revenue streams into their local currency.

This site does not aim to cover foreign exchange services that engage in speculative trading but will aim to guide the reader to understand the essential basics required to secure a good deal when buying or selling currency for their own pocket!