Exchange of one currency to another internationally is called as Foreign Exchange. It is traded “over the counter” with the help of inter banking system. This banking system is a network of several other banks & institutions. It is accessible to large number of institutions, corporations, speculators .the investors bet over the different currencies.The investor who has taken the currency or money with the higher yield but sell it at the lesser yield will collect the difference. This is how foreign exchange (Forex) basically works.  Remember that with any investment, you should not invest more money than you can afford to lose.