Foreign Exchange Markets

Foreign Exchange Markets
When we are looking for ways to invest our money, a rain of investing starts to appear in front of us, with the most different acronyms, styles, investment methods, especially with strange names, and one of several options of investing our time and one bit of our free money, is Forex, abbreviating FX Market.

But after all, what is forex?
As its name suggests, it is a decentralized financial market (multinational operation), which works with International Currency Exchange in pairs, for example:

EUR (Euro) / USD (US Dollar).
JPY (Japanese Yen) / USD. (Obs)

It is estimated that this Financial Market moves 2-5 trillion US dollars per day. According to data from 2007, this market moved around 3.43x more than the sum of all Securities Markets in the World, and 9.63x the volume traded in the World Stock Market.

Awesome is not it?
In this Fantastic Financial World, there are Exchanges and Negotiations among major Banks, international Central Banks, Multinational Corporations, Governments, and other financial institutions.
And in a thin slice of the whole amount, we are small investors. Restricted to acting in this financial environment, only through Forex Brokers or banks that have this type of forex investment for their clients, allowing us to participate and capture a section of this huge business.

And how has Forex started to work?
 The first negotiations of this model were initiated from exchanges according to the Base Price established for Gold at that time and the establishment of values ??of other Currencies referring to the exchange for gold, thus acquiring the values ??of all the major currencies that circulated in the world market (they went through a speculation of base value to occur exchanges of values)

And in practice?
With Forex trading, we can buy or sell trading options by predicting whether the exchange rate of a currency will increase or fall. These speculations are made with Coin Pairs, that is:
* The amount of secondary currency that is required to purchase a unit of the base currency, for example:
* In the Euro / USD pair, the Euro is the base currency and the rate will show the USD amount required to buy 1 Euro.
* Now, if we predict that the price of the euro will rise, we buy the business and we can sell when we have profits.
* Or it will close automatically when you reach a predefined profit level at the beginning.

What are the Risks and Advantages of this business?
First of all, like all the forms of negotiations that exist today, all kinds of business, where the market is always volatile and unpredictable, we always have the present risk, where we can end up doing a bad business and lose our invested Values, we can get a Business that is stable or going a little bad and surprise us with the positivity and profit that it can provide us, so just like other forms of business, we have to take into account to prepare the mind and to have Cold Blood to delve into any type of Business. And just as we all have our Advantages and Disadvantages. I will quote them below:

* You can set the stop (stop) and profit withdrawal options that avoid large losses.
You can close the position at any time when you see the level of profit anticipated.
In forex trading, you receive the leverage option offered by the broker, which is the investment in partnership with the brokerage firm, according to the option chosen.
In forex trading, the margin allows you to increase the investment when you find a potential winner in the option.

* You can not predict maximum profit.
* There is a greater risk with Leverage.

Forex - What is Leverage?

The concept of leverage is widely used by companies and investors.
We investors use leverage to significantly increase the returns that can be provided on an Investment. They leverage their investments using various instruments that include options, futures and margin accounts.

Already companies can use leverage to finance their assets. Companies can use debt financing to invest in commercial operations in an attempt to increase shareholder value. In Forex, investors use leverage to profit from the swings in exchange rates between two different currencies.

The Leverage that is used in the Forex market is one of the most profitable strategies that investors can choose to make.
Leverage is like a loan provided to a negotiator by the broker who is dealing with your Forex account.
When a trader decides to enter the Forex market, he must first open a margin account with one of the Forex brokers.

Stop ...

Let's take a short break, so you do not absorb so much information at once.
As we have seen above, it is a Market with a good variety of Market Dynamics and Negotiations. And let's look at One by One, and from there you choose the one that best fits your profile. It does not matter if you are a Small Investor, or a Big Investor, like any form of business, the Risk is always High.
And in the Forex Market, we can always take a more passive and cautious stance, negotiating and aiming for profits gradually, or we can use an Aggressive Posture, Trading High, being able to Succeed in the Transaction, getting very high profits or losing your money invested, For like all types of business, High Wagering also means Great Risk too.


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