FX trading relies on a spread-based market and in many ways is similar to option trading since it is highly directional and highly leveraged.  With FX trading you are comparing both sides of a currency pair versus securities which have an underlying equity value.

For example:  GBP vs. USD is one currency pair or EUR vs YEN is another currency pair.

Currency unlike stock will never go to zero.  Sure, it can devalue in a huge manner or the price can appreciate greatly.  To trade in this market you need to have a certain fundamental understanding of the markets and what direction the market is moving in, then choose an area based on your analysis.  You want to look at a certain country as well as just their currency.  Is the economy strong?  What are the interest rates like?  If the job growth strong or are they headed for a recession?

Try to make sure you understand everything you can about the country of the currency pair you are looking at.  You will need all this information to make the right decision to make the trade.

Another thing to remember is that there are two types of trades: Prodollar and Antidollar.

This is where you will be trading the US dollar against an array of world currencies.  Stick to the majors like the Australian or Canadian dollar if you are just starting out.  There really is enough volatility and a boat-load of information to be analyzed with those currencies.