Forex, what is it?

forexOne of the greatest financial market in the world is Forex, also known as Foreign Exchange. If you never heard about it we can tell you Forex is one of the best way to invest your money and earn them online.

Basically, Forex is an investment on currencies. Most traded ones are United States Dollar (USD), Euro (EUR), British Sterling (GBP) and Japanese Yen (JPY). Those currencies are, for this reason, also known as “majors”. The price of every currency is confronted with another one, forming a currency pair. Let’s make a simple example of that to explain better. Currency pair EUR/USD put on comparison euro price and american dollar price. Suppose this currency pair has a value of 1.2000: this means to buy one Euro (the first currency in the pair) are needed 1.2 dollars.

Prices of each currency pair are constantly changing so every trader can invest his or her money trying to anticipate price variations and speculate on them. In the example before, we can “buy” EUR / USD (that means buying the first currency in the pair and selling the second one) if we expect price will go up. If this happen we earn on the difference between the two prices, if not we lose money based on that difference.

Trading on forex is quite simple and straightforward: everyone can do it successfully. To forecast prices there are two main analysis: technical one and fundamental one. The first is based on charts: traders try to invest money depending on prices past movements. The second one is based on relevant news: in this case, traders try to invest depending on news and informations (those can be economic news, politic news and more).

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