What is Trading and Forex

in LeoFinance2 months ago

Hello friends, I hope you are well, due to today's economic calendar, which showed that there could be sudden changes in the market, I preferred not to do any technical analysis and decided to make a post about trading and forex. For those who still do not know what it is, try to make it as simple and understandable so that it is much easier for those who do not have any experience.

What is Trading and Forex

Before giving you the definition and explanation of these two words that are as a title, I will talk about what the financial market is, since it is very important and we could not begin to know about trading and forex without knowing about them.


Financial Market.

It is a physical or virtual space in which the exchanges of financial instruments are carried out between economic agents, which define the prices of said asset. A financial market is governed by the law of supply and demand. That is, when someone wants something at a certain price, they can only buy it at that price if there is another person willing to sell that something at that price.

The main functions of the Financial Markets are:

• Put in contact with everyone who wants to intervene in it.
• Set an appropriate price for any asset.
• Provide liquidity to assets.
• Reduce intermediation terms and costs, facilitating greater circulation of assets.

Types of Financial Markets:

Forex: It is the currency market

CFD derivatives market: These are contracts for differences.

Stock market: It is the one that works with stocks, bonds, among others.

Commodity market: It is the one that works with minerals.

Cryptocurrency market: It is the one that works with cryptocurrencies.

After talking about the basics of the financial market, I will talk about the Forex market, which is where this course is based.

What is Forex?

It is a global and decentralized market in which currencies are exchanged. It is one of the most active markets in the world, with an average daily trading volume of $ 5 trillion. Learn more about what forex is, how the currency market works, and how forex leverage works.

What is a currency, is the currency that rules in each country, that is, the currency of the United States is the dollar, that of Japan is the Yen, in Canada it is the Canadian Dollar and so on depending on the country, it is that simple .

What is trading?

It is the activity carried out to exchange financial instruments. Remote since the creation of the world, the best example to understand trading is bartering or job exchanges for food or payment. Just as you can see that it is not something absolutely new, only that today it is used only to call financial assets or financial instruments that way.

What is a trader?

It is a person or entity in finance that buys and sells financial products in order to generate profits in the short, medium or long term. You can act independently or work for an investment bank.

The advantages of being a trader

You can work from anywhere in the world, as long as you have an internet connection.

You can choose your own hours.

You are your own boss.

Among other advantages, of course all this is anchored to the dedication and time that you are going to invest, not everything is as simple as it seems but with perseverance, discipline and dedication all these goals could be achieved.

I hope you liked my post, comment if you would like me to publish one talking about some term or something else that you want to know about forex, I will gladly do it.

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