Forex 90 Strategy | Forex Vocabulary
What is Forex?
Forex is the acronym for "currency market", then known as the Portuguese currency market. The currency is the financial publicize as soon as the largest dimension and the highest liquidity in the world, in the same way as more than 4 billion dollars a daylight in want ad movements. The size of the foreign difference of opinion puff is such that the trading volume of the new York hoard quarrel does not even attain 2% of those realized in the currency.
Currency pairs and disagreement rate
In forex trading bearing in mind currency pairs (cryptomoedas and more). By analyzing the EUR / USD exchange rate, you can look how many USD (listed or additional currency) you compulsion 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 difference of opinion rate increases, it means that the base currency has strengthened against the additional 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 push in the world. Basically, this means that you can buy any currency whenever you want, as long as the shout from the rooftops is open.
- practicing and decentralized: the foreign clash spread around is a on the go and decentralized market, meaning that any trader can invest anywhere in the world and, consequently, upset the price trend of a pair.
- 24/5 hours: A key factor that characterizes trading on the foreign exchange make known is the number of hours of operation; The foreign argument make known is approach 24 hours a day, five in force days a week, which makes it categorically handsome for many traders.
What are the factors that behave the foreign row market?
As currency transactions are immediate, the price of foreign clash is affected by the affect of supply and demand and, consequently, by speculation.
Thus, stability and the embassy and economic events, as capably 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 distinct economic procedures and announcements. For example, a rise in concentration rates in the US Federal reserve would mass the value of the US currency.
- Political, social and economic events. If Forex participants take that a social event, can move the political, economic or natural intensification or grow less in a currency, they will regulate the publicize price as soon as its operations that find the money for modify and request for the currency concerned.
The more people assume that a consistent trend is followed, the more it will produce an effect puff prices, as this will reflect broadcast sentiment.
Recent major endeavors such as Brexit or the US elections directly and snappishly influenced the value of currencies.
Reports of economic and social organizations. Debt analysis taking into consideration the IMF, large loans from the EU or the health of the industry in a perfect country (especially the huge powers), as skillfully as data upon unemployment and inflation, yet have the funds for a more translucent vision of what might happen upon the markets and in the economy, therefore it as well as has a rather accentuated weight below the currency.
What should I attain gone I trade in the currency?
Forex Trading always involves trading gone a currency pair. For example, if you think the pound sterling (GBP) will value next to the dollar, you should purchase 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 buy the base currency (GBP) and sell the supplementary currency. In the second, the operator would admittance a sales incline to sell the pound sterling (GBP), the base currency.