How Does the Forex Market Work?
You ask about what is Forex, it is the abbreviation of Foreign exchange, a concept that it means “currency exchange”, and if you still do not know what I’m talking about, this is neither more nor less than the largest and most liquidity throughout the world, reaching a daily trading volume of approximately 4 trillion dollars!
And since know that this amount of money is difficult to process, so that you have a point of comparison, the New York Stock Exchange, which is the largest stock market in the world, needs around 30 days to move the amount of money from which I’m talking to you, that is, the one that Forex moves in a day … Incredible, right?
How does the forex market work?
Forex does not have a physical place to operate, but operates 24 hours a day for 5 days a week without time restrictions through virtual financial procedures that are carried out from anywhere in the world and from which people search buy money paying with money … Yes, you listened well.
This is because there are different currencies circulating in the land and each of them has a different value, what we will call currency, so to explain what Forex is, and likewise how the forex market works, I explain it to you a simple way, as I would call in words of a penny. What we do and the people who are also dedicated to what Forex is, is to buy the currency of one country paying with the currency of another. Simple!
As you can see, when we talk about buying and selling currencies we always negotiate from two different currencies, that’s why when we work with Forex currencies will always appear in pairs, the most common used are the Euro- Dollar, the Pound-Dollar pair and the Dollar-Yen pair, handling a different exchange price for each of them.
This exchange price depends on a fundamental factor of supply and demand, that is, the more people are buying a currency, the value of that currency will rise and vice versa, if many people start selling a certain type of currency, the value of that currency will inevitably fall, that is how the price of currencies can vary even daily.
That is why the key factor in what is the Forex, is to learn to predict the behavior of currencies and thus know when the value of a currency will rise or fall to buy and sell at the right time, so that we can do Grow our capital. This is how the forex market works!
This is not about chance, to move in what is Forex you should learn to analyze the market, either from statistical graphs or from the financial, political and macroeconomic world news until little by little learn to be a trader, that is, to handle the art of how the forex market works and what Forex is in a professional way