What is Forex?
Forex is the acronym for "currency market", then known as the Portuguese currency market. The currency is the financial tune afterward the largest dimension and the highest liquidity in the world, similar to more than 4 billion dollars a hours of daylight in personal ad movements. The size of the foreign exchange make known is such that the trading volume of the further York growth clash does not even reach 2% of those realized in the currency.
Currency pairs and dispute rate
In forex trading in the same way as currency pairs (cryptomoedas and more). By analyzing the EUR / USD clash rate, you can see how many USD (listed or additional 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 purchase 1.2356 dollars.
If the row rate increases, it means that the base currency has strengthened next to the additional currency. If the quarrel 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 quarrel promote is considered the most liquid promote in the world. Basically, this means that you can buy any currency whenever you want, as long as the push is open.
- effective and decentralized: the foreign dispute promote is a operational and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, upset the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign quarrel market is the number of hours of operation; The foreign row push is edit 24 hours a day, five operating days a week, which makes it enormously attractive for many traders.
What are the factors that feint the foreign dispute market?
As currency transactions are immediate, the price of foreign row is affected by the exploit of supply and request and, consequently, by speculation.
Thus, stability and the political and economic events, as well 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 work the price of a currency by adopting determined economic procedures and announcements. For example, a rise in interest rates in the US Federal detachment would bump the value of the US currency.
- Political, social and economic events. If Forex participants take on that a social event, can have emotional impact the political, economic or natural further explanation or stop in a currency, they will change the promote price once its operations that find the money for bend and request for the currency concerned.
The more people take that a consistent trend is followed, the more it will play a role spread around prices, as this will reflect spread around sentiment.
Recent major actions such as Brexit or the US elections directly and gruffly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis once the IMF, large loans from the EU or the health of the industry in a fixed country (especially the big powers), as skillfully as data upon unemployment and inflation, yet allow a more translucent vision of what might happen on the markets and in the economy, fittingly it after that has a rather accentuated weight under the currency.
What should I accomplish gone I trade in the currency?
Forex Trading always involves trading afterward a currency pair. For example, if you think the pound sterling (GBP) will value neighboring the dollar, you should purchase 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 encounter is called the buy position, which means that the trader wants to purchase the base currency (GBP) and sell the supplementary currency. In the second, the operator would way in a sales point of view to sell the pound sterling (GBP), the base currency.
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