Since we decided to dedicate ourselves to investments, We have heard about Forex on numerous occasions. The forex market is one of the most popular in the world, but do we really know it? Now you have the opportunity to know what Forex is, how it is operated and all the financial instruments that we have available to carry out our investments.
The Foreign Exchange Market, better known as Forex, is the most important financial market in the world. Millions of operations are carried out in it at the end of the day and it is a market in which we can invest 24 hours from Sunday to Friday.
We go into Forex
Forex offers us the opportunity to invest in a large number of financial instruments, we mean currencies. Yes, the currencies that correspond to the economies of most countries or economic communities, such as the European Union.
One of the main advantages of this market is that it does not have a physical location, so all the actions that we can carry out will be done electronically, which makes these actions even easier. So much so, that in a day Forex can register up to more than 4 trillion of traded volume.
When handling such amounts of money, at first the foreign exchange market was accessible to very few, mainly large international companies and banks, however, little by little Forex has become more popular and nowadays, has many different types of investors, from multinational companies to individuals.
Currency trading
Despite being a very popular market, Forex trading is not an easy action. Although it is true that we have a large number of currencies available, the reality is that before carrying out any action, it is recommended that we study and analyze all the movements that have occurred in the market, as well as the changes experienced by our own. values.
We must not forget that Forex is a highly fluctuating market, which depends directly on the economies of the countries.
This is the slowest step, since it will take us a while to know all the ins and outs of the market. But once we have it under control, the operations will come rolling, since the next step we must take is to choose on which trend we want to direct our investments.
Remember that currency pairs can move up or down and for this reason you should know what factors are affecting economic systems. What we do here is acquire a stake in one of the economies present in the market and the operation consists of comparing one currency with anotherTherefore, products are always purchased in pairs, that is, we work on two values.
What currencies are the most popular?
Regarding the currency pairs we have available, these are multiple, although the most popular is the dollar-euro (USD / EUR). The American currency is the main currency with which investors work, followed by the European value, the Japanese yen and in fourth place, the British pound.
Although most operations are carried out through these currencies, it does not mean that they are the only ones that Forex makes available to us, since in this market we also find others such as the Swiss franc, the Canadian dollar or the Australian dollar .
To operate in Forex we have as a reference three main world stock markets. We refer to the one in Tokyo, which opens at 00:00 and closes at 09:00; On the other hand, we can also invest in the one in London, in its morning session from 08:00 in the morning to 17:00 in the afternoon; and finally the New York Stock Exchange, in the evening from 13:00 p.m. to 22:00 p.m.
What advantages does this market offer?
As we have been telling you, Forex is one of the most important financial markets in the world, due to the amount of operations that are carried out daily, as well as the volume of business it generates. But it is that investing in this market offers us a great number of advantages, for this reason it has gained so much popularity in recent years.
The first thing to note is that all the operations that we carry out in Forex do not entail any additional commission, they only charge us the corresponding spread but this is usually quite low, the normal thing is that it is around 0.1%, a ridiculous figure.
It must also be taken into account that we can operate directly on the market, without the need to use the services of an intermediary. In any case, if we wish we can always do it through a specialized broker like eToro, IG Markets, Plus500, etc. but this is a free option.
Also, remember that Forex is open 24 hoursFrom Sunday night to Friday afternoon and to operate we have available the three main exchanges that we have discussed in the previous section.
In addition, the lots that we can acquire are very flexible, with just a small initial amount of money, we can achieve great benefits, all this, adding the leverage that it offers, with which we can generate a large volume of capital. Therefore, we will also have high liquidity.
Finally, as an added advantage, it should be noted that to invest in currencies we can do it by making minimum deposits, reaching an amount less than 500 dollars, which makes Forex accessible to everyone.