Apr 11

What is foreign exchange market ?

The foreign exchange market or currency market is a sector of the economy where they sell different types of legal tender of the country . Here a definition and profitability.

Market exchange

Money and coins, and the user must know the reference values ​​, also known as rate changes or rates of change. These values ​​are in direct proportion to the price of central currency : the U.S. dollar.

In this way , the coins and currencies of the world are listed on this exchange market , ranging in value based on market conditions such as supply and demand , and macroeconomic conditions.

These macroeconomic conditions relate to industrial growth of a country, its financial stability , their future plans , their relations with other countries , etc. .

All these factors determine the price of a currency, which is positioned in one way or another against the U.S. dollar , increasing or decreasing this value based on economic schemes mentioned above.

Prices and performances

The currency market , also known as Forex, is one of the most liquid markets and world variables . In the foreign exchange market , currencies are traded in pairs ( for example , you buy Euros and sell dollars).

Playing or speculating on valuation of certain currencies , users can have access to huge profits , thanks to the phenomenon of leverage.

Because the forex market is the market for small variations (at cents ) , then users need to trade a lot of foreign exchange to get good profits.

In this sense there is in the currency markets , a leverage of 100 to 1. This means that for every euro invested in forex user , the house bank or broker will give 100 euros for trade.

Due to the high volatility of this market , the user is exposed to significant losses, but also available if you make massive profits right speculations based on exchange rates of all countries of the world.