Forex - The Foreign Exchange Market
Posted by CNC Job Offers on 10:06 PM
the most traded parities are the EUR / USD (about 28% of the total volume), the USD / JPY (about 14% of the total volume), the GBP / USD (about 9% of the total volume). The dollar is the most traded currency in the world, it represents more than 85% of trade on Forex, as shown in the graph below which shows the most traded currencies:
So I will now introduce you how the Forex is working…
The Forex, or Foreign exchange market, is i said before the market where currencies are quoted againt other currencies. Example: EURO against the DOLLAR, or more usually known as EUR/USD. So, the value of one euro in dollar is priced. In our example, the EURO is the basic currency, the DOLLAR is the currency which makes you earn money on Forex or not in your trades. To sum up, whatever you do on EUR/USD parity, sell or buy, you win or lose dollars. When you close your position, the profit or loss is converted into basic currency of your account at the market price.
The parities on the Forex evolve according to the economic indicators of the countries involved in parity. For the EUR/USD it will thus be necessary to take into consideration all the economic news of the Euro area, as well as the United States. Each economic news is forecast, and news better than its forecast generally makes increase the currency concerned. Thus if good news on EURO is announced, EUR/USD parity will goes up and if a bad news comes out, EUR/USD will goes down.
The Forex, or Foreign exchange market, is i said before the market where currencies are quoted againt other currencies. Example: EURO against the DOLLAR, or more usually known as EUR/USD. So, the value of one euro in dollar is priced. In our example, the EURO is the basic currency, the DOLLAR is the currency which makes you earn money on Forex or not in your trades. To sum up, whatever you do on EUR/USD parity, sell or buy, you win or lose dollars. When you close your position, the profit or loss is converted into basic currency of your account at the market price.
The parities on the Forex evolve according to the economic indicators of the countries involved in parity. For the EUR/USD it will thus be necessary to take into consideration all the economic news of the Euro area, as well as the United States. Each economic news is forecast, and news better than its forecast generally makes increase the currency concerned. Thus if good news on EURO is announced, EUR/USD parity will goes up and if a bad news comes out, EUR/USD will goes down.
