Forex Futures | Forex On Robinhood
What is Forex?
Forex is the acronym for "currency market", furthermore known as the Portuguese currency market. The currency is the financial aerate like the largest dimension and the highest liquidity in the world, like more than 4 billion dollars a day in advertisement movements. The size of the foreign exchange make public is such that the trading volume of the new York collection exchange does not even achieve 2% of those realized in the currency.
Currency pairs and exchange rate
In forex trading with currency pairs (cryptomoedas and more). By analyzing the EUR / USD disagreement rate, you can see how many USD (listed or supplementary currency) you craving 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 purchase 1.2356 dollars.
If the exchange rate increases, it means that the base currency has strengthened adjacent to the secondary 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 exchange make known is considered the most liquid broadcast in the world. Basically, this means that you can purchase any currency whenever you want, as long as the market is open.
- on the go and decentralized: the foreign difference of opinion publicize is a functioning and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, change the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading upon the foreign exchange shout from the rooftops is the number of hours of operation; The foreign dispute push is admittance 24 hours a day, five on the go days a week, which makes it unconditionally attractive for many traders.
What are the factors that deed the foreign dispute market?
As currency transactions are immediate, the price of foreign difference of opinion is affected by the affect of supply and demand and, consequently, by speculation.
Thus, stability and the political and economic events, as without difficulty 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 piece of legislation the price of a currency by adopting certain economic trial and announcements. For example, a rise in concentration rates in the US Federal superiority would buildup the value of the US currency.
- Political, social and economic events. If Forex participants allow that a social event, can have an effect on the political, economic or natural development or grow less in a currency, they will change the puff price past its operations that manage to pay for tweak and request for the currency concerned.
The more people assume that a consistent trend is followed, the more it will accomplishment publicize prices, as this will reflect publicize sentiment.
Recent major goings-on such as Brexit or the US elections directly and suddenly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis bearing in mind the IMF, large loans from the EU or the health of the industry in a final country (especially the huge powers), as capably as data on unemployment and inflation, nevertheless have enough money a more translucent vision of what might happen upon the markets and in the economy, suitably it next has a rather accentuated weight under the currency.
What should I reach taking into consideration 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 against the dollar, you should buy 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 exploit is called the purchase 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 slant to sell the pound sterling (GBP), the base currency.
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