What is Forex?
Forex is the acronym for "currency market", furthermore known as the Portuguese currency market. The currency is the financial express considering the largest dimension and the highest liquidity in the world, considering more than 4 billion dollars a day in classified ad movements. The size of the foreign disagreement publicize is such that the trading volume of the extra York growth row does not even attain 2% of those realized in the currency.
Currency pairs and row rate
In forex trading later currency pairs (cryptomoedas and more). By analyzing the EUR / USD difference of opinion rate, you can see how many USD (listed or supplementary currency) you compulsion to purchase 1 EUR (base currency).
Therefore, if the quarrel rate of the EUR / USD currency pair is 1.2356, this means that each euro can buy 1.2356 dollars.
If the exchange rate increases, it means that the base currency has strengthened adjacent to the supplementary 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 exchange make known is considered the most liquid puff in the world. Basically, this means that you can purchase any currency whenever you want, as long as the puff is open.
- operational and decentralized: the foreign exchange make public is a in action and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, imitate the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign difference of opinion push is the number of hours of operation; The foreign argument spread around is edit 24 hours a day, five practicing days a week, which makes it no question handsome for many traders.
What are the factors that do its stuff the foreign dispute market?
As currency transactions are immediate, the price of foreign disagreement is affected by the work of supply and request and, consequently, by speculation.
Thus, stability and the embassy and economic events, as without difficulty as the monetary policy of the countries, are elements that picture the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly be in the price of a currency by adopting definite economic proceedings and announcements. For example, a rise in captivation rates in the US Federal coldness would increase the value of the US currency.
- Political, social and economic events. If Forex participants endure that a social event, can imitate the political, economic or natural elaboration or halt in a currency, they will modify the present price later its operations that present bend and request for the currency concerned.
The more people say yes that a consistent trend is followed, the more it will ham it up promote prices, as this will reflect announce sentiment.
Recent major endeavors such as Brexit or the US elections directly and sharply influenced the value of currencies.
Reports of economic and social organizations. Debt analysis subsequent to the IMF, large loans from the EU or the health of the industry in a total country (especially the huge powers), as capably as data on unemployment and inflation, yet find the money for a more translucent vision of what might happen upon the markets and in the economy, for that reason it next has a rather accentuated weight under the currency.
What should I realize in imitation of I trade in the currency?
Forex Trading always involves trading when a currency pair. For example, if you think the pound sterling (GBP) will value adjoining the dollar, you should purchase 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 additional currency. In the second, the operator would door a sales point of view to sell the pound sterling (GBP), the base currency.
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