In short, it's buying and selling currencies - or money, if it sounds better. Imagine that you live in Great Britain. Your friends tells you he isgoing to the US next week for vacations and therefore he requires someAmerican money. Obviously, in the US no shop would accept British pounds.Luckily, you have some dollars left from your last business trip to NewYork, so you take your wallet, get twenty banknotes of 100 USD and sell themto your friend. Obviously, he pays you back with British pounds - because youlive in London, you are not interested in any other currency.Well, you have just made a forex operation! Now, imagine that insteadof taking British pounds from your friend, you ask him to give you back thesame amount he received - 2000 USD, to be accurate. At this moment, theexchange rate was 1.4282, let's assume. He spends two joyful weeks in theUS, traveling around the states, tasting some delicious stakes with Californianwine and even singing local anthem. Then your friend comes back to Londonand he has to give you back 2000 USD. Luckily, the exchange rate of USdollar versus British pound has increased dramatically due to some latest newsfrom the US - it's 1.4021 now, meaning US dollar is now more expensive inthe UK! So, once you receive 2000 USD back, you go to a currency exchangewindow at your favorite bank and change dollars back to pounds. And then -surprize, you made a profit because of the currency rate fluctuations!Now, you actually did some primitive form of forex trading!