Short for Foreign (currency) Exchange, Forex is the world’s biggest market for trading in currencies. As much as 2 trillion US dollars worth of currency are traded on the Forex on a daily basis. Compare this with the approximately 25 million US dollars traded on the NYSE and you’ll get the picture - Forex is huge.
So what is Forex all about? Simply put, Forex entails buying one currency, let’s say Turkish Lira, and selling another, say US Dollars. In Forex, currencies are always traded and quoted in pairs. The exchange is made through a broker.
Just like the stock market where you are investing in a company, with Forex you are in a way investing in a country. If your company is a success, the value of your stock goes up. Much the same principle is at work in Forex. If the economy of the country whose currency you are trading is robust, the value of that currency will also go up - and you can then sell it for a profit. Read more…
No comments:
Post a Comment