The foreign exchange marketfr.wikipedia.org/wiki/Forex, also known under the name of Forex, is the international market decentralized for the purchase and the sale of currencies.
Forex is the biggest financial market in the world; it is also known under the name of foreign exchange market, FX or foreign exchange market. Forex allows companies and private individuals to convert currencies. We take part in it, at the simplest level, when we travel abroad and when we sell the currency of our country of origin in exchange for liquid assets which we need for our spending abroad. Forex, beyond the transactions made by the private individuals and the companies, is important for the financial institutions, the central banks, and States. He facilitates trade and investment at the international level because he allows the companies which earn money in a currency to buy goods and services in another currency. Why Forex? To negotiate on Forex allows you to speculate on the relative performance of a currency with regard to another one. Forex is the most popular financial market in the world, with a colossal volume of transactions made every day. The majority of these transactions are made by speculators who buy and sell on the fluctuations in the intra-day courses. The daily volume of transactions on the market of Forex is estimated at more than 4 000 billion US dollars in the world. The commercial and financial transactions represent only approximately 10 % of this volume of transactions Investors' significant number and an impressive quantity of currencies(slogans) exchanged every day grant to Forex an exceptional level of liquidity. This means that it is a market to the particularly easy access for all; we can generally buy currencies(slogans) from the demand(request) because there is always somebody else somewhere to agree to sell them or conversely. Besides, foreign exchange markets are not dependent on systems of committees(commissions), which sometimes complicate some other markets. Generally, is enough a small initial payment for beginning and the costs relative to the operations are low. The negotiations are made in the daytime and at night and allow to benefit from an important leverage. Functioning The courses(prices) of Forex are always esteemed in pairs of currencies(slogans). This gives some explanation(is understandable) by the fact that you buy a currency(slogan) by selling another one. Each of the currencies(slogans) of the pair is recognized thanks to a code of currency(slogan) of three letters, for example, EUR / USD (euro against US dollar), or GBP / USD (pound sterling against US dollar). The first currency(slogan) indicated in the pair is the basic currency(slogan). We call it sometimes also the primary currency(slogan). The second currency(slogan) of a pair Forex is known under the name of highly-rated currency(slogan) or currency(slogan) of the counterparty(compensation). A course(price) Forex indicates the quantity which a unity(unit) of the basic currency(slogan) allows to buy in currencies(slogans) of the counterparty(compensation). In the example GBP / USD = 1,63792, one pound sterling amounts to 1,63792 dollars. To buy a pound, it is thus necessary to sell 1,63792 dollars. If you sell a pound, you receive 1,63792 dollars. Example of operation Let us suppose that an article in the current events led to you to think that the pound is going to appreciate with regard to(compared with) the Australian dollar. You decide to buy 10 000 £ of GBP / AUD to 1,41703, for a cost of 14 170,30 A. A few weeks later, the course(price) is 1,52703, that means that 10 000 £ which you hold(detain) increased in value. You decide to take your earnings(gains) by reconverting your books(pounds) to Australian dollars, for a profit of 1 100 A (15 2703 - 14 1703). You can see the detail of the transaction(deal) in the picture(board), to the right. Long and short positions According to your feeling, you can either buy ( long position) or sell ( short position) on the foreign exchange market. Let us admit that for some time, you watch the euro and that you think that he(it) is going to appreciate. In this case, you take a long position on the EUR / USD. In other words, you buy euros and sell simultaneously dollars. If you think that the euro is going to depreciate, you take a short position on the EUR / USD. It means that you sell euros and buy dollars. The quotation of Forex A quotation on Forex always includes two courts(courses, prices, yards): a course(price) of sale (' bid price ') and a course(price) of purchase (' ask price '). The difference between both represents the spread. This gap represents the loads(responsibilities) which the broker incorporates into the course(price). The course(price) of purchase is the course(price) from which you can buy a unity(unit) of the basic currency(slogan). The course(price) of sale is the price to pay to sell a unity(unit) of the basic currency(slogan). Let us look at the quotation EUR / USD on the right. The course(price) of purchase (or ' ask ') is the amount which you pay in dollars ( 1,28944 ) for every bought euro. It represents the maximum which the broker will be ready to pay for euros, by selling US dollars. The course(price) of sale (or ' bid ') of 1,28952 is the amount which you receive in US dollars for every sold euro. Points The fluctuations in a currency(change) are measured in points. A point is generally the fourth figure after the comma. Thus for the EUR / USD, a fluctuation from 1,28944 to 1,28952 represents a point
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