Phabbyfundz
Active member
Forex is an acronym for foreign exchange.
The foreign exchange market determines the relative values of different currencies. The price of a currency is actually the reflection of what the market thinks about the current and future conditions of a country's economy compared to other economies.
When you buy U.S dollars with British pounds, you are in fact buying shares of the U.S economy, expecting the U.S economy to out perform the U.K economy.
In short the main task of a forex trader is to buy a currency pair when exchange rates are expected to rise in the future, then sell a currency pair when its exchange rates is expected to fall.
Currency pairs are divided into majors, crosses and exotics. Majors represent developed economies and are highly liquid with relatively low spreads.
The foreign exchange market determines the relative values of different currencies. The price of a currency is actually the reflection of what the market thinks about the current and future conditions of a country's economy compared to other economies.
When you buy U.S dollars with British pounds, you are in fact buying shares of the U.S economy, expecting the U.S economy to out perform the U.K economy.
In short the main task of a forex trader is to buy a currency pair when exchange rates are expected to rise in the future, then sell a currency pair when its exchange rates is expected to fall.
Currency pairs are divided into majors, crosses and exotics. Majors represent developed economies and are highly liquid with relatively low spreads.
