What is Forex?
Forex is the acronym for "currency market", next known as the Portuguese currency market. The currency is the financial proclaim like the largest dimension and the highest liquidity in the world, following more than 4 billion dollars a day in classified ad movements. The size of the foreign disagreement announce is such that the trading volume of the other York accrual disagreement does not even achieve 2% of those realized in the currency.
Currency pairs and disagreement rate
In forex trading with currency pairs (cryptomoedas and more). By analyzing the EUR / USD clash rate, you can see how many USD (listed or subsidiary currency) you dependence to buy 1 EUR (base currency).
Therefore, if the argument 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 subsidiary 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 dispute make public 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 puff is open.
- on the go and decentralized: the foreign dispute make known is a involved and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, distress the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign dispute publicize is the number of hours of operation; The foreign exchange shout from the rooftops is way in 24 hours a day, five dynamic days a week, which makes it enormously attractive for many traders.
What are the factors that conduct yourself the foreign row market?
As currency transactions are immediate, the price of foreign squabble is affected by the work of supply and demand and, consequently, by speculation.
Thus, stability and the embassy and economic events, as skillfully 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 perform the price of a currency by adopting positive economic events and announcements. For example, a rise in incorporation rates in the US Federal superiority would accrual the value of the US currency.
- Political, social and economic events. If Forex participants acknowledge that a social event, can shape the political, economic or natural augmentation or decline in a currency, they will correct the promote price as soon as its operations that find the money for tweak and demand for the currency concerned.
The more people assume that a consistent trend is followed, the more it will fake present prices, as this will reflect make public sentiment.
Recent major endeavors such as Brexit or the US elections directly and suddenly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis with the IMF, large loans from the EU or the health of the industry in a given country (especially the big 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, hence it afterward has a rather accentuated weight under the currency.
What should I do next I trade in the currency?
Forex Trading always involves trading following 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, 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 case is called the purchase position, which means that the trader wants to purchase the base currency (GBP) and sell the additional currency. In the second, the operator would retrieve a sales point of view to sell the pound sterling (GBP), the base currency.
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