What is the Forex ? Forex stands for Foreign Exchange (which meansForeign Exchange ), it is the largest financial market in the world.
The Forex market is where currencies are bought and sold. In the Forex market all currencies are traded in real time.
Trading with currencies means that there is a simultaneous exchange between two transactions. If a currency has been purchased, this means that it has been sold. To better understand this concept, consider for example that the two goods you buy AND what is the payment method you use to pay for those goods.
The Forex market is the place to which currencies are traded in real time, so people can trade one currency against another and make a profit on this transaction. Profits are obtained when one is able to determine what value a currency will increase in time (these times can be both short than long). The Forex market is open 24 hours a day, five days a week and is based in five major cities: New York, London, Sydney and Tokyo. The Forex market is open to individuals over 18 years.
Forex trading at first glance seem discouraging, but it is not. It is possible to understand the Forex without any prior experience in economic or financial. This is an exercise both challenging and exciting, which can lead to many opportunities.
Some basic rules on Forex:
- The first currency belonging to the pair is called the “base currency”.
- The “base currency” is usually the U.S. Dollar. Traders usually carry out their transaction with the U.S. dollar against another currency, known as “against currency”.
- Currencies are quoted in pairs. For example: the rate of USD / JPY = 2.34 means that a dollar is worth 2.34 Japanese yen.
- When the dollar is the base unit and the rates rise, this means that the dollar appreciates in value and the other currency depreciates. If after some time, the USD / JPY rises to 2.50, the dollar is strengthening because it can buy more yen.
