Foreign Exchange Market (Forex) Introduction

The FOREX or Foreign Exchange Market is the market where we are dealing with currency parities.

Example: EURO against the dollar, or more commonly known as EUR / USD. It is therefore beside the value of one euro in dollars.

In our example, the EURO is the base currency, the dollar is the currency that generates your more or less value for your trades. In short, you buy or sell the EUR / USD, you win or lose dollars. At the closing of the position, more or less this value is then converted to base currency of your account at the market.

Parities Forex evolve as new economies of the two currencies involved in the parity. For the EUR / USD will therefore monitor all the economic news
of the euro area, as well as those of the United States. Each new economic prévisionnée, a new and better than its forecast generally increase its currency. So if a new sort EURO, EUR / USD and appreciate good news sort USD, EUR / USD will depreciate.

However, keep in mind that a good new EURO can devalue the EUR / USD, where the news was widely anticipated (most often at the rate of change of central banks), or again that new USD grows stronger dollar on the rise, because even better.