What is Forex?
Forex is the acronym for "currency market", also known as the Portuguese currency market. The currency is the financial tone subsequently the largest dimension and the highest liquidity in the world, behind more than 4 billion dollars a day in commercial movements. The size of the foreign disagreement push is such that the trading volume of the extra York deposit quarrel does not even accomplish 2% of those realized in the currency.
Currency pairs and disagreement rate
In forex trading once currency pairs (cryptomoedas and more). By analyzing the EUR / USD clash rate, you can look how many USD (listed or additional currency) you habit to buy 1 EUR (base currency).
Therefore, if the quarrel rate of the EUR / USD currency pair is 1.2356, this means that each euro can buy 1.2356 dollars.
If the quarrel rate increases, it means that the base currency has strengthened neighboring the supplementary currency. If the clash 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 publicize is considered the most liquid present in the world. Basically, this means that you can purchase any currency whenever you want, as long as the market is open.
- operating and decentralized: the foreign difference of opinion publicize is a full of life and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, impinge on the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign difference of opinion shout out is the number of hours of operation; The foreign row market is approach 24 hours a day, five full of life days a week, which makes it completely handsome for many traders.
What are the factors that measure the foreign row market?
As currency transactions are immediate, the price of foreign dispute is affected by the accomplishment of supply and demand and, consequently, by speculation.
Thus, stability and the political 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 sure economic proceedings and announcements. For example, a rise in incorporation rates in the US Federal superiority would growth the value of the US currency.
- Political, social and economic events. If Forex participants undertake that a social event, can have an effect on the political, economic or natural enlargement or grow less in a currency, they will fiddle with the broadcast price as soon as its operations that give fiddle with and demand for the currency concerned.
The more people resign yourself to that a consistent trend is followed, the more it will con announce prices, as this will reflect shout out sentiment.
Recent major deeds such as Brexit or the US elections directly and tersely influenced the value of currencies.
Reports of economic and social organizations. Debt analysis gone the IMF, large loans from the EU or the health of the industry in a unconditional country (especially the big powers), as well as data upon unemployment and inflation, still find the money for a more translucent vision of what might happen on the markets and in the economy, consequently it as a consequence has a rather accentuated weight under the currency.
What should I reach gone I trade in the currency?
Forex Trading always involves trading taking into account a currency pair. For example, if you think the pound sterling (GBP) will value against 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 raid is called the buy position, which means that the trader wants to purchase the base currency (GBP) and sell the additional currency. In the second, the operator would get into a sales turn to sell the pound sterling (GBP), the base currency.
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