Beginners learn to speculate on foreign exchange: an article to understand what is foreign exchange trading

Forex/FX is the common abbreviation for "foreign exchange trading", which generally refers to investors and speculators trading in the foreign exchange market. For example, if an investor expects the value of the dollar to rise relative to the euro, they are likely to buy dollars and sell euros ahead of time at a lower exchange rate. If the dollar does rise against the euro, they can sell dollars and buy euros at the higher rate, making a profit on the difference.

The foreign exchange market is traded through the telephone and computer terminals, synchronized between hundreds of banks around the world, it is not as stocks and futures as a specific trading site. So the foreign exchange market is not the traditional sense of "market", but an over-the-counter market.

Foreign exchange market structure

Many investors may be curious, when they are in the foreign exchange transactions, in the end with whom the transaction? The major banks or investment banks pass their own quotes to the forex brokers through the quote platform, and the forex brokers get the quotes and then choose the best price to offer to the retail customers.

Why do exchange rates move?

Foreign exchange quotes are the ratio of one currency to another, also known as the exchange rate. For example, EUR/USD 1.064 means that 1 euro can be exchanged for 1.064 US dollars. The foreign exchange market is a global trading market, the value of national currencies depends on its supply and demand relationship, the monetary policy of each country as well as the global economic situation will affect the exchange rate changes all the time.

The essence of foreign exchange trading is the exchange of one country's currency for another. The currencies of different countries circulate in the world, and foreign exchange is the "instrument of payment for international transactions". In Japan is the yen, in the United States is the dollar, in the United Kingdom is the pound, in Germany and France is the euro, and so on. These different currencies between the exchange behavior is "foreign exchange transactions", also known as "foreign exchange". So in the final analysis, foreign exchange transactions is to buy a pair of currency combinations in a currency and sell another currency, in foreign exchange transactions, the sale of commodities is "money", and the price of this "commodity" is the exchange rate.

What's the point of foreign exchange trading? The above is the content of the introduction of Forex International. The first thing you need to do is to get your hands on some of the most popular products and services in the world, and you can do it all on your own.