Saltar al contenido

What is Forex?


Today, the movement of finance is something that should be seen through a magnifying glass by economists and finance experts. Since the free market exists, the world economy has completely changed. It is no longer something about which you have abstract knowledge, nor is it something that is often only limited to the borders of a country and its neighbors. Now, thanks to the internet, television and social networks; it’s something to keep an eye on at all times.

Nobody wants our assets to devalue enormously tomorrow, or to have a depression as has happened several times in the last couple of centuries. Given this, it is smart to be able to know a little about how the world economy works and how it is that the movements of a country on a company can end up having an impact on the economy of a nation.

There are ways to get an idea of ​​what happens, what happens through the supply and demand of different financial assets. There are stock exchanges that often dictate how much a company is worth, as well as companies that come to invest abroad in order to make a country richer in the long run. But what many ignore is how different currencies are used globally and how they affect the world economy.

All of this can be seen through Forex, the foreign exchange market. Best of all, as it is fully decentralized, anyone can participate in it and be able to keep up with the latest movements. These are often a flow of money for some and losses for all.

Te Pude Interesar
Should we keep investing in Bitcoin?

The handling of currencies worldwide

When a company pays its employees on the other side of the world, the company will often have to transact through banks in order to pay these employees. This involves the purchase of a particular currency, and then the completion of that transaction. When this occurs, the price of a currency or its equivalent in the currency from which the purchase was made can go up or down. This is what is often seen within the currency markets, such as Forex.

The people who carry out their transactions within the Forex market are known as traders. Traders are dedicated to investing or selling in certain currencies, in order to make money that way. Actually, the way Forex works is not very different from how a stock market works, but it has its own main characteristics.

For example, you have to be aware of important dates on which certain transactions are made, as well as have a highly analytical mind, and have the correct tools in order to make a prediction that ends up being a profit for the trader. However, this may be easier said than done, so it will take a lot of practice, experience and knowledge to be able to achieve your goals in the market.

Fortunately, you can make use of the different educational material that you can find throughout the internet to get you started. But, you will have to remember that for the more serious material you will have top pay to get it.