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What is Forex?

Forex is an international financial market where currency exchange takes place. It was founded in 1976, when all countries of the world abandoned the gold standard and switched to the Jamaican system, in which exchange rates are set not by the state, but by the market.

Forex has become simply necessary for the normal functioning of the global economy, to ensure the exchange of capital between different countries.

Sometimes traders call Forex currency exchange. But Forex is not. This is an international over-the-counter market. It is not tied to a specific place of trading, as it is a virtual market, the participants of which can make transactions with currency from anywhere in the world. Another difference from the Forex market is the relatively small amount of funds needed for trading.

 

How is trading in the Forex market?

Trading on the Forex market (trading) is carried out by currency pairs, in which one currency acts as a commodity and the other as a means of payment for this commodity. The most common currency pair is the euro / dollar, or, as they say, EUR / USD. This means that euros are bought and sold for dollars. It is necessary to understand that trading on Forex is carried out in significant amounts, usually equivalent to $ 100,000. Therefore, in order for an ordinary person to enter the Forex market, a dealer or broker who provides a trader is needed , So This means that for each $ 1 a trader can make a transaction for $ 50. In this case, the leverage will be 1:50. This method of trading in the Forex market is called marginal. trade.

For many, speculative trading has become a profession that brings high income. Moreover, trading on the Forex market allows you to protect your savings from inflation: with proper trading, the profitability of a trader’s work is many times higher than inflation. To increase the amount of profit, you can use the so-called leverage, i.e. borrow the capital of a forex dealer, having a fixed minimum amount on the account - margin. This allows the trader to open positions that are significantly larger in volume, as if there is significant capital on his account. As a result, the trader bears proportional risks, acquiring the opportunity to get a solid income.