What is Forex?
Forex is the acronym for "currency market", as a consequence known as the Portuguese currency market. The currency is the financial proclaim in the manner of the largest dimension and the highest liquidity in the world, past more than 4 billion dollars a daylight in flyer movements. The size of the foreign disagreement publicize is such that the trading volume of the other York store squabble does not even achieve 2% of those realized in the currency.
Currency pairs and quarrel rate
In forex trading similar to currency pairs (cryptomoedas and more). By analyzing the EUR / USD quarrel rate, you can see how many USD (listed or subsidiary currency) you infatuation to purchase 1 EUR (base currency).
Therefore, if the dispute rate of the EUR / USD currency pair is 1.2356, this means that each euro can buy 1.2356 dollars.
If the clash rate increases, it means that the base currency has strengthened against the secondary currency. If the row rate eventually decreases, it means the opposite.
The characteristics of the Forex or Forex market
- Liquidity: Because of the $ 5 billion that circulates daily, the foreign argument publicize is considered the most liquid announce in the world. Basically, this means that you can purchase any currency whenever you want, as long as the publicize is open.
- in action and decentralized: the foreign argument push is a dynamic and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, pretend to have the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign clash promote is the number of hours of operation; The foreign squabble announce is gate 24 hours a day, five involved days a week, which makes it totally handsome for many traders.
What are the factors that play the foreign disagreement market?
As currency transactions are immediate, the price of foreign argument is affected by the take effect of supply and demand and, consequently, by speculation.
Thus, stability and the political and economic events, as skillfully as the monetary policy of the countries, are elements that portray the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly proceed the price of a currency by adopting distinct economic trial and announcements. For example, a rise in assimilation rates in the US Federal superiority would growth the value of the US currency.
- Political, social and economic events. If Forex participants say yes that a social event, can imitate the political, economic or natural magnification or end in a currency, they will modify the make public price past its operations that find the money for bend and demand for the currency concerned.
The more people give a positive response that a consistent trend is followed, the more it will statute make known prices, as this will reflect make public sentiment.
Recent major undertakings such as Brexit or the US elections directly and rapidly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis later the IMF, large loans from the EU or the health of the industry in a resolution country (especially the big powers), as without difficulty as data on unemployment and inflation, nevertheless provide a more translucent vision of what might happen on the markets and in the economy, as a result it with has a rather accentuated weight below the currency.
What should I realize later I trade in the currency?
Forex Trading always involves trading subsequent to a currency pair. For example, if you think the pound sterling (GBP) will value adjacent to the dollar, you should buy the GBP / USD currency pair.
If, on the contrary, we expect a devaluation, that is to say that the dollar will strengthen, he will have to sell the currency pair he has.
The first skirmish is called the buy position, which means that the trader wants to buy the base currency (GBP) and sell the supplementary currency. In the second, the operator would gain access to a sales viewpoint to sell the pound sterling (GBP), the base currency.
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