What is Forex?
The Forex market is the international currency market. Forex is an acronym for Foreign Exchange market. It is the largest financial market in the world, with a turnover of more than 5.4 trillion dollars a day. To understand what this volume of business means, it is what can move the New York Stock Exchange (the largest in the world) in a whole stock market.
What is traded in Forex?
With money. How? Yes, Forex trading consists of buying and selling currencies, currencies, that is, money. The currencies are traded through a broker or dealer and are traded in pairs, for example, the euro and the US dollar: (pair EUR / USD). Both of buying and selling included in smart online trading. That’s the point!
You really do not buy or sell anything physically so you may confuse a little. Think of buying foreign currency as the purchase of a share in a country’s economy, since the price of its currency is a direct reflection of what the market thinks about the present and future state of the country’s economy. In Forex, as mentioned, trading in currency pairs, as stated in this paragraph the price of a particular currency pair reflects the economic conditions of a particular country against the country of the other currency that makes up the pair. To understand economic conditions you can read on online reviews.
Unlike other financial markets, the Forex market is decentralized and does not have a physical location. The Forex market is considered an interbank market or OTC (over-the-counter, over the counter), due to the fact that this market works electronically, in a network between banks 24 hours a day.
At the end of the 90s of the 20th century, only investors with a high financial power could access Forex trade, with an initial capital of over 10 million dollars. Forex was originally conceived to be used by banks and large institutions. However, due to the expansion of the internet, today there are online Forex companies that offer Forex trading “retail” for retail investors.