What is Forex?
Forex is the acronym for "currency market", in addition to known as the Portuguese currency market. The currency is the financial proclaim in the same way as the largest dimension and the highest liquidity in the world, next more than 4 billion dollars a daylight in want ad movements. The size of the foreign squabble puff is such that the trading volume of the extra York deposit exchange does not even accomplish 2% of those realized in the currency.
Currency pairs and quarrel rate
In forex trading bearing in mind currency pairs (cryptomoedas and more). By analyzing the EUR / USD clash rate, you can see how many USD (listed or secondary currency) you compulsion to purchase 1 EUR (base currency).
Therefore, if the exchange rate of the EUR / USD currency pair is 1.2356, this means that each euro can purchase 1.2356 dollars.
If the disagreement rate increases, it means that the base currency has strengthened neighboring the auxiliary currency. If the argument 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 present in the world. Basically, this means that you can buy any currency whenever you want, as long as the broadcast is open.
- dynamic and decentralized: the foreign squabble publicize is a functional and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, move the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign squabble shout out is the number of hours of operation; The foreign exchange puff is open 24 hours a day, five operating days a week, which makes it unquestionably handsome for many traders.
What are the factors that undertaking the foreign quarrel market?
As currency transactions are immediate, the price of foreign clash is affected by the work of supply and demand 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 describe the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly acquit yourself the price of a currency by adopting clear economic proceedings and announcements. For example, a rise in fascination rates in the US Federal detachment would mass the value of the US currency.
- Political, social and economic events. If Forex participants bow to that a social event, can have an effect on the political, economic or natural elaboration or decrease in a currency, they will tweak the broadcast price following its operations that manage to pay for fine-tune and demand for the currency concerned.
The more people undertake that a consistent trend is followed, the more it will feign market prices, as this will reflect publicize sentiment.
Recent major actions such as Brexit or the US elections directly and unexpectedly 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 supreme country (especially the huge powers), as competently as data upon unemployment and inflation, still present a more translucent vision of what might happen upon the markets and in the economy, suitably it as well as has a rather accentuated weight below the currency.
What should I get in the manner of I trade in the currency?
Forex Trading always involves trading similar to a currency pair. For example, if you think the pound sterling (GBP) will value next to the dollar, you should purchase the GBP / USD currency pair.
If, on 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 case is called the buy position, which means that the trader wants to purchase the base currency (GBP) and sell the subsidiary currency. In the second, the operator would read a sales aim to sell the pound sterling (GBP), the base currency.
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