Profit from the Internet and forex trading
Forex, (Foreign Exchange) also known as currency market, FX, or currency trading, is a decentralized global market for all currencies (money) that are traded around the world
Put more simply, it is a currency market. This means that those who operate in it, focus on converting some currencies (or currencies) into others. Although it is true that in some cases currency exchange is done as a practical maneuver, in the vast majority it is a method to obtain profits.
This market is the largest and most liquid on the planet, with a daily trading volume that exceeds 5 trillion dollars. The other stock markets (like company stocks or commodities) in the world as a whole don't come close to this.
If you have ever traveled abroad, you have made a Forex transaction anyway. If you travel to the United States for example, you will convert your pesos to dollars. When you do this, the exchange rate between the two currencies (based on supply and demand) determines how many dollars you will receive for your pesos. And the exchange rate fluctuates continuously.
Unlike company stocks or commodities, forex trading is not done in markets, but is exchanged directly between two parties in an OTC (over the counter) market. The forex market is established through a global network of banks, spread over four main centers in different time zones: London, New York, Sydney and Tokyo. As there is no physical place through which trades are processed, you can invest in forex 24 hours a day.
a contract is agreed to buy or sell a certain amount of a certain currency at a set price, on a fixed date in the future. Unlike a forward, a futures contract is legally binding
Most forex investors are not interested in receiving the physical delivery of the currency, but instead make predictions about exchange rates to profit from price movements in the market.
They operate in the foreign currency markets to control the money supply, inflation and / or interest rates of the currency of their country. They often impose exchange rates and even often use their international reserves to stabilize the market. The expectation or rumor of a central bank intervention may be enough to alter the value of a currency. However, central banks do not always achieve their objectives, and in some cases the market may impose itself on a central bank. This happened in the 1992-93 debacle of the Exchange Rate Mechanism, and more recently in the Asia-Pacific.
A first currency is the one that precedes the pair, while the next is called the second currency. Forex trading always involves buying one currency and selling another, and therefore they are listed as pairs: the price of a pair is determined by calculating how much a unit of the first currency is worth in the second currency.
The currencies of a pair are identified with a three-letter code, in which normally the first two correspond to the region and the third to the currency itself. For example, GBP / USD is a pair made up of the British pound and the US dollar.
There are different ways to trade forex, but they all work the same way: buying one currency and selling another simultaneously. Traditionally, forex trading was done through a traditional broker, but thanks to online trading providers, you can profit from currency price movements using derivatives such as Turbo24, barriers, vanilla options and CFDs. Turbo24s, barriers, vanilla options and CDFs are leveraged products that allow you to open a position by paying only a fraction of its total value. Unlike unlevered products, you will not own the underlying asset, but instead will open a position when you think the market value is going to go up or down. While leveraged products can increase your profits, they can also increase your losses if the market moves against you.