Several softwares are being used in the game to capture video in PvP areas and even to report cheaters.
I would like to mention one of these which is easy to use.
General: After installation of the program, destinate the "Output Folder", where the video and picture will be saved.
FPS: You can determine the FPS counters location, or remove it completely (A visible FPS counter may give you a clue about your in-game recording in progress).
Video: In this section, you can choose the video formats, quality and the hotkeys. You can customize audio, webcam, logo and effects from the 'settings'.
Image: You can select the image format and hotkeys which helps you to capture an in-game screenshot.
Output: You can see the destination of your video and image recordings here.
How to reduce a video file size?
Freemake Video Converter will help us to resize the videos. You can download it from here.
After installation, go to Video section and choose the video file which is desired to be reduced. I recommended you to choose WMV (different formats also can be selected). After adjusting the file destination and quality, total new size of the video will be seen at the right bottom (Original video size was 3.97GB and the new video size is reduced to 974MB)
Thanks to Acheroon for preparing this useful guide.