As we have said earlier, in the Forex market they earn money by predicting the price movement of an asset for a certain period of time, using various trading strategies. In the same article, we learn about what is meant by this word. There are four types of underlying assets: currency pairs, commodities, stocks and indices. Let's look at each of them separately.
Forex currency pairs
Currency pair is the ratio of the value of one currency to another. For example, a pair of EUR / USD shows us the value of the euro against the dollar. If we see that EUR / USD is equal to 1.256, this means that for one euro they give 1.256 dollars. When trading, we always focus on the first currency in the pair. This is a very popular type of asset, because is very volatile and quotes (prices) change all the time, constantly giving traders the opportunity to make money on these changes.
This term means a fairly wide range of assets. These are precious metals, oil, products of agricultural activity and others. You can track changes in the price of goods with the help of news and an understanding of how the market for supply and demand is formed. If you learn how to track the global situation, then you can earn very well on this. Commodity assets are usually used when opening long-term transactions and it is not accepted to trade them for a short time.
These are securities that give their owner the right to receive part of the company's profits (dividends), and make him a co-owner, commensurate with the number of shares he has. In other words, if a company is worth $ 1,000 and issued 100 shares of $ 10 each, then the owner of twenty shares owns 20% of this company. But the value of the enterprise is not fixed. With favorable events, stocks can grow in price because they increase demand, or fall, if the situation is not the best way. Accordingly, by tracking key points related to the company's activities, it is possible to predict a rise or fall in stock prices and make good money on it.