Forex 0 Commission | Forex Tester 2
What is Forex?
Forex is the acronym for "currency market", next known as the Portuguese currency market. The currency is the financial appearance in imitation of the largest dimension and the highest liquidity in the world, gone more than 4 billion dollars a morning in classified ad movements. The size of the foreign clash announce is such that the trading volume of the supplementary York store squabble does not even reach 2% of those realized in the currency.
Currency pairs and quarrel 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 auxiliary currency) you obsession to purchase 1 EUR (base currency).
Therefore, if the clash rate of the EUR / USD currency pair is 1.2356, this means that each euro can purchase 1.2356 dollars.
If the quarrel rate increases, it means that the base currency has strengthened next to the additional currency. If the exchange 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 disagreement make public 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 present is open.
- full of life and decentralized: the foreign clash announce is a energetic and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, disturb the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign row publicize is the number of hours of operation; The foreign dispute shout out is retrieve 24 hours a day, five vigorous days a week, which makes it certainly handsome for many traders.
What are the factors that play a role the foreign exchange market?
As currency transactions are immediate, the price of foreign row is affected by the deed 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 portray the contributions.
- Shares of private and public economic agents. Financial institutions, governments and central banks in each country can directly take action the price of a currency by adopting positive economic measures and announcements. For example, a rise in amalgamation rates in the US Federal detachment would buildup the value of the US currency.
- Political, social and economic events. If Forex participants understand that a social event, can imitate the political, economic or natural magnification or decline in a currency, they will modify the shout out price in imitation of its operations that give bend and demand for the currency concerned.
The more people agree to that a consistent trend is followed, the more it will ham it up push prices, as this will reflect shout out sentiment.
Recent major actions such as Brexit or the US elections directly and shortly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis afterward the IMF, large loans from the EU or the health of the industry in a unconditional country (especially the big powers), as capably as data upon unemployment and inflation, still pay for a more translucent vision of what might happen on the markets and in the economy, in view of that it also has a rather accentuated weight below the currency.
What should I pull off later I trade in the currency?
Forex Trading always involves trading subsequent to 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 charge 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 admission a sales tilt to sell the pound sterling (GBP), the base currency.
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