What is Forex?
Forex is the acronym for "currency market", furthermore known as the Portuguese currency market. The currency is the financial vent taking into account the largest dimension and the highest liquidity in the world, once more than 4 billion dollars a day in announcement movements. The size of the foreign disagreement broadcast is such that the trading volume of the new York store difference of opinion does not even achieve 2% of those realized in the currency.
Currency pairs and row rate
In forex trading bearing in mind currency pairs (cryptomoedas and more). By analyzing the EUR / USD disagreement rate, you can see how many USD (listed or additional currency) you habit to buy 1 EUR (base currency).
Therefore, if the row rate of the EUR / USD currency pair is 1.2356, this means that each euro can purchase 1.2356 dollars.
If the exchange rate increases, it means that the base currency has strengthened next to the auxiliary currency. If the difference of opinion 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 shout out is considered the most liquid make known in the world. Basically, this means that you can purchase any currency whenever you want, as long as the shout out is open.
- functional and decentralized: the foreign quarrel shout out is a in action and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, have emotional impact the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign difference of opinion make public is the number of hours of operation; The foreign difference of opinion shout from the rooftops is contact 24 hours a day, five effective days a week, which makes it very handsome for many traders.
What are the factors that feat the foreign row market?
As currency transactions are immediate, the price of foreign exchange is affected by the feign of supply and demand and, consequently, by speculation.
Thus, stability and the embassy and economic events, as well as the monetary policy of the countries, are elements that describe the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly measure the price of a currency by adopting certain economic procedures and announcements. For example, a rise in inclusion rates in the US Federal coldness would growth the value of the US currency.
- Political, social and economic events. If Forex participants take that a social event, can put on the political, economic or natural magnification or fall in a currency, they will bend the make known price similar to its operations that pay for alter and request for the currency concerned.
The more people take on that a consistent trend is followed, the more it will work publicize prices, as this will reflect make known sentiment.
Recent major happenings such as Brexit or the US elections directly and tersely influenced the value of currencies.
Reports of economic and social organizations. Debt analysis similar to the IMF, large loans from the EU or the health of the industry in a utter country (especially the huge powers), as competently as data on unemployment and inflation, still come up with the money for a more translucent vision of what might happen on the markets and in the economy, therefore it furthermore has a rather accentuated weight below the currency.
What should I get like I trade in the currency?
Forex Trading always involves trading with a currency pair. For example, if you think the pound sterling (GBP) will value adjoining the dollar, you should buy the GBP / USD currency pair.
If, upon the contrary, we expect a devaluation, that is to tell that the dollar will strengthen, he will have to sell the currency pair he has.
The first accomplishment is called the purchase position, which means that the trader wants to purchase the base currency (GBP) and sell the auxiliary currency. In the second, the operator would get into a sales point to sell the pound sterling (GBP), the base currency.
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