What is Forex?

Forex, also known as Forex, FX or Forex trading, is a decentralized global market for all currencies traded around the world. This market is the largest and most liquid market in the world with a daily trading volume of more than $ 5 trillion. Other stock markets around the world are not doing that. But what does that mean? Take a closer look at forex trading and find interesting business opportunities that are not available in other investments.

If you have already traveled abroad, you have made a forex transaction. Travel to France and convert your books to the euro. When you do so, the exchange rate between the two currencies – based on supply and demand – determines how much euros you earn for your books. And the exchange rate is constantly changing.
On Monday, the pound could give you EUR 1.19. On Tuesday 1.20 euros. This little change may not seem like a big problem. But think bigger. A large foreign company can pay foreign employees. Imagine what you could do on the bottom line if, as in the previous example, change one currency by the other more expensive depending on when you will do it? These few cents are added quickly. In both cases it is possible, as a traveler, or business owner to make your money until the course is more favorable.

Just as on the stock market, you can change the currency according to what you think is worth it. (or where they are heading). The big difference with Forex is that you can trade up or down just as easily. If you think the piece will increase the value, you can buy it if you think it will reduce the value that you can sell. With such a big market. You find buyers when they sell and sell when you buy, it’s much easier than in other markets. Maybe you hear about the news that China devaluates its currency to attract more foreign companies to its country.

If you think this trend will continue, you could do forex trading, selling Chinese currencies against another currency, such as the US dollar. More Chinese currency will devalue against the dollar, more profits will be. If the Chinese currency increases its value while it has its open position, then the losses will increase and they will want to leave the transaction.