Forex is short for Foreign Exchange Market, also known as spot market. The Forex market is the largest financial market in the world, and the turnover is much more than stock markets and futures (commodities) markets.
What do they do, there on the currency markets?
Quite simply, they are trading money, while buying one currency they are selling another.
Currency trading is conducted through a broker and it is traded in pairs, or a cross, as it is called. A cross could be EURUSD Euro and Dollar or GBPJPY Japanese Yen and British Pound sterling.
When trading currency, you will not buy the physical item, so it may seem a little confusing. Currency trading is almost as if you are buying a share in a country.
All other financial products are traded on exchanges, that is to say, a central place where these securities are traded, however that is not the case in foreign exchange trading, there is no central market place for currency trading, as it is traded all over the globe, and at all time.
Until recently it was only those with a great deal of money, who could be involved in forex trading, but now, with "retail forex brokers" anyone can participate, even with small money, and there is a great deal of progress in currency trading.