FOREX: What is it and how does it work

 At the same time the "Forex" market, known as the foreign exchange market, the world's largest and financially. Imagine how much money the average daily volume of U.S. $ 1900000000000 there! You do not want to take that million dollars?

Forex is the buying of one currency and simultaneously selling another. Exchange rates, for example the Euro / USD, double quotes (EUR / USD) or U. S. Dollar / Japanese Yen (USD / JPY) technologies. So, basically Forex trading.

There are two reasons for buying and selling currencies. Buy or sell products and services in a foreign country or by the daily turnover of about 5% of businesses and governments in their national currencies must convert profits made in foreign currencies.

Process to other 95%, or so-called speculation. In fact, it is not ruled out by the market, investors often times, I believe, a high-quality information and trade.

On one side of each speculative stock in the industry on the opposite side of his superior knowledge and superior knowledge of the participants believe that the other believes that the participant.

The best trading opportunities for speculators is the most common (and therefore more cash or cash can be converted to the meaning of) "segments" of money is called, are traded. Today, more than 85% of all daily transactions business includes the main branch.

A true 24-hour market, Forex trading begins each day in Sydney, and moves around the world as a business day in Tokyo, London and New York, the first, each begins with a financial center. Unlike other financial markets, investors and economic events occur, react to market fluctuations caused by social and political moment - a real time clock.

The forex market is a non-prescription (OTC) or 'interbank' is considered. Transactions between two parties, by telephone or via an electronic network is performed. Trading is not centralized on a stock by stock markets and futures.

Understanding Forex quotes

Reading a Forex quote the first bit of confusion "might look like. 1) The first currency listed first base currency and 2) the value of the base currency is always 1: I remember two things, but it is really very simple.

The money for the center of the Forex market, and normal nail $ 'is considered the base currency. "Segments", the USD / JPY, USD / CHF and USD / CAD contains. For these currencies and many others, quotes, quote currency pair is expressed in units of $ 1 USD. For example, USD / JPY 110.01 means that the dollar is equal to 110.01 yen in Japan offers.

Dollar rises when the main unit and the proposed currency, the dollar appreciated and the other currency has weakened. USD / JPY 113.01 increases, we have already said, will now buy more yen than before, because the dollar is stronger.

Three exceptions to this rule is the pound sterling (GBP) Australian Dollar (AUD) and Euros (EUR) a. In this case, 1 pound equals 1.7366 U.S. dollars, while the GBP / USD 1.7366 as you can see an offer.

These three currency pairs, the U.S. dollar is the base rate, citing a weakening dollar's rise will be required is equal to 1 dollar a pound, the euro and Australian dollar means.

In other words, to evaluate a higher offer, which increases the value of the base currency. A low price means that the base currency is weakening.

The so-called cross currency pairs involving the U.S. dollar, but the principle is the same. For example, one euro is equal to 127.95 yen in Japan, EUR / JPY 127.95 means the proposal.

While Forex trading is often a "supply" and "supply" will offer a two-sided. "Offer" (against the purchase price at the same time), you can sell the base currency is the price. 'Love' you (at the same time selling the currency against), you can buy the base currency is the price.