parallax background

What is forex?

 

Forex is the exchange of one currency (foreign currency) for another at an agreed price. Forex is the world's largest foreign exchange market.

It is a decentralized market, i.e. it operates outside the power of a central authority, where the world's currencies are exchanged, which means that transactions are fast, and are completed without the supervision of intermediaries.

The Forex market is considered an interbank or OTC (over-the-counter) market, due to the fact that this market operates electronically.

Forex is an abbreviation for Foreign Exchange market. Currencies are traded through a broker or dealer (broker/distributor) and are traded in pairs, for example euro and US dollar: (EUR/USD pair).

This market is open 24 hours a day, five days a week (Monday to Friday). Even when the market is closed from Friday to Sunday, something always happens that will wreak havoc on various currencies at its opening on Monday.

 

In Forex, as mentioned, currency pairs are traded, the trading price of a given currency pair reflects the economic conditions of a given country versus the country of the other currency that makes up the pair.

One of the advantages of Forex is that its practice is accessible to everyone, because it is not necessary to have a high amount of money to perform operations. Starting as a "Mini trader", with an account of up to 50 dollars, you can start trading without any problems.

The most common currencies traded on Forex are: USD (US Dollar), EUR (Euro), JPY (Japanese Yen), GBP (British Pound), CHF (Swiss Franc), among others.

What sets Forex apart is that you can trade in both uptrends and downtrends. If you think a currency will rise in price, you can buy it. If you think its price will fall, you can sell it. Also, because Forex is so large, finding buyers and sellers is much easier than in other markets subject to liquidity.