What is Forex

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How Does The forex market work

Unlike most financial markets, the forex market is different, within the foreign exchange market, there is no physically specific place to trade. The entire foreign exchange market operates through the use of electronic banking network infrastructure, various financial institutions and the electronic transactions between individuals. Moving accord to the time difference, foreign exchange transactions per day originate from Sydney and then move to Tokyo, London and New York.

Buying, selling, and spreads

The forex market sets the initial price or quote, And the other financial markets make the same as the purchase price included and selling prices. Suppose the dollar / yen trading price (bid / ask) is at a rate 117.33 / 117.36, if you were to believe that the dollar will weaken, you could press at the 117.33 price to sell the currency pair.

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The definition of foreign exchange

Forex refers to the OTC market while buying a currency and selling another currency. The currencies utilized in the OTC markets trading units are issued by the national government or central bank. The money value of a unit is used as a measure of the transaction

  • What makes forex so appealing

    Changes in economic climate and policies generally only produce a short-term impact on the exchange

  • Pricing in Forex Market

    Foreign exchange markets and prices are mainly affected and influenced by the flow of various trading and investment between various countries

STARTING POINT

Currency quotes are usually composed of five decimal places, for example if the EUR / USD quotes are 1.24110 / 1.24111, the last number is the decimal point and the second last point is the pips. Most of the time, the movement of the markets will be monitored based on the pips movement. Therefore, the trader will monitor each pip movement (1 pip = 0.00010) changes in the currency pair they are trading. There are two ways a trader will go to make the market prediction which is technical analysis and fundamental analysis. Technical traders will make use of various analytical methods such as charts, trend lines, support / resistance levels, and mathematical models to identify opportunities while attempting to make trading decisions. Another type of trader tends to rely on fundamental analysis and various economic indicators towards the reaction of a specific currencies national economy and will incorporate the analysis of market drivers, such as GDP growth, inflation, interest rates and so on