How can You trade in the Forex Market and Know about the term Forex
The financial market is very big, we all have heard at least about the market and share companies. Not everything ends here. There is a lot of trading in the entire financial system that varies from raw materials, to shares, derivative products and to forex trading. Among many others. What is unique about Forex? Forex is a currency market , money exchange. Also, what makes it special is that it is the largest market that has, and therefore, the most liquid.
The foreign market (or exchange), better known as Forex, was born with the aim of facilitating the exchange of money in this increasingly global world. It is decentralized, and mainly works for money exchange. However, not everything ends here. The possibilities that have emerged from it are huge. You can speculate in this market, in addition to finding refuge in other currencies, or for example the exchange rate if we have shares from other countries. For better understanding, this article is all about Forex.
What is Forex?
Forex is the global currency exchange market. In turn, it is with a loose margin, the largest financial market in the world . Its growth in recent years has been so great that the total volume that moves due to the internationalization of goods and services is very much. Do most of his work because of the financial products. In fact, its resources are so great that only in 2019 around 6 billion were moved per day.
The features that make this store unique are many. The most important are the following:
Bulk packing.
Very liquid.
Many people and many people are involved in the business.
Great geographic dispersion.
The market is open 24 hours a day, except on holidays.
There are many factors that affect and move the market.
The most important news for this market is usually published at a specific time that has been set in the past. Have all participants access the news at the same time. The only exception is that large companies can see the orders sent by their customers. This has created many ideas to try to win in the market, such as those that follow the "strong hand". There are many ideas , and this is especially aimed at hoping that the movement of the currency price will follow the volume discussed.
How does Forex work?
In the Forex market, money is traded with crosses . Each is labeled as XXX/YYY and refers to the ISO 4217 number that is expressed on each associated value. YYY refers to the currency value, and XXX the currency. In other words, XXX represents the price YYY needs to buy. For example, at the time of this writing, EUR/USD, also known as Eurodollar, is trading at 1.0732.
If the exchange rate increases, it means that more dollars are needed to buy 1 Euro. And again, if it goes down it means that less money is needed to buy one euro.
Coins available in the market
Among the top 20 currencies that have been traded we find the following:
- ==USD, United States.
- ==EUR.
- ==JPY, Japanese Yen.
- ==GBP, British Pound.
- ==AUD, Australian dollar.
- ==CAD, Canadian dollar.
- ==CHF, Swiss Franc
- ==CNY, Chinese Yuan.
- ==HKD, Hong Kong dollar.
- ==NZD, New Zealand Dollar.
- ==SEK, Swedish Krona.
- ==KRW, South Korean Won.
- ==SGD, Singapore dollar.
- ==NOK, Norwegian Krone.
- ==MXN, Mexican Peso.
- ==INR, Indian Rupee.
- ==RUB, Russian ruble.
- ==ZAR, South African Rand.
- ==TRY, Turkish Lira.
- ==BRL, Brazilian real.
Trade exchange, and its value is the cross of a pair of different values, that is, there is always one value with another, the plurality of connections that are given or more again
How can you trade in the forex market?
There are many different products that participants can use to do their work. The target followed may be different, but not the type of product. In the same way, similar goals can be pursued, but with different products. It all depends on the impact and the type of situation that the participant is thinking about. Among the most commonly used products or tools are the following.
There are different tools to invest in the forex market
Foreign exchange exchange. The time that passes in these operations until the settlement of the money is two days. If the order is made within 1 day, it is called T/N (to/next).
Foreign exchange forward. This tool is the most used, and represents 70% of all transactions. Here the foreign exchange is fixed in the contract, but its settlement is carried out after the date specified in the contract.
Where it has gained popularity due to the ease that some traders offer to invest in Forex is thanks to derivative products. The 4 most important will be the following.
Financial options. Where the buyer has the right, but not the obligation, to buy or sell a currency at a future price that has already been determined on the date that was determined.
Financial future. It is an agreement to exchange the currency on a fixed date at a specified price.
for the future. An exchange of one currency for another at the rate of a future date.
financial transactions . It is a contract between two parties to buy and sell a number of money, and re-buy and sell a number of money in a certain price on a predetermined date.
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