What is Forex?
Forex is the acronym for "currency market", after that known as the Portuguese currency market. The currency is the financial make public following the largest dimension and the highest liquidity in the world, once more than 4 billion dollars a day in poster movements. The size of the foreign row push is such that the trading volume of the other York accretion quarrel does not even attain 2% of those realized in the currency.
Currency pairs and dispute rate
In forex trading considering currency pairs (cryptomoedas and more). By analyzing the EUR / USD exchange rate, you can see how many USD (listed or supplementary currency) you infatuation to buy 1 EUR (base currency).
Therefore, if the disagreement 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 next to the additional currency. If the squabble 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 row promote 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 announce is open.
- in force and decentralized: the foreign clash present is a working and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, involve the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign row promote is the number of hours of operation; The foreign quarrel promote is read 24 hours a day, five lively days a week, which makes it entirely handsome for many traders.
What are the factors that exploit the foreign dispute market?
As currency transactions are immediate, the price of foreign squabble is affected by the affect of supply and request and, consequently, by speculation.
Thus, stability and the embassy and economic events, as competently 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 law the price of a currency by adopting clear economic measures and announcements. For example, a rise in fascination rates in the US Federal reserve would enlargement the value of the US currency.
- Political, social and economic events. If Forex participants tolerate that a social event, can influence the political, economic or natural intensification or stop in a currency, they will bend the publicize price subsequently its operations that present correct and demand for the currency concerned.
The more people assume that a consistent trend is followed, the more it will exploit publicize prices, as this will reflect announce sentiment.
Recent major events such as Brexit or the US elections directly and sharply influenced the value of currencies.
Reports of economic and social organizations. Debt analysis bearing in mind the IMF, large loans from the EU or the health of the industry in a definite country (especially the huge powers), as without difficulty as data on unemployment and inflation, yet pay for a more translucent vision of what might happen upon the markets and in the economy, suitably it with has a rather accentuated weight below the currency.
What should I attain like 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 against 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 act 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 right to use a sales point to sell the pound sterling (GBP), the base currency.
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