What is Forex/Forex Trading? Check out the explanation!

What is forex / forex? Check the explanation! Forex - What is Forex / Forex Trading? Forex is a term that you should be familiar with, especially with the sheer number of advertisements associated with this activity. But do you really understand what Forex is?

Foreign exchange trading or foreign exchange, or forex for short, is the process of exchanging foreign currency. This term is better known as foreign currency, foreign currency, foreign currency or foreign currency in Indonesian. The advent of foreign exchange / forex is a response to the need for foreign exchange such as traveling abroad, buying goods from abroad, etc.

Apart from non-commercial purposes, some people trade in the foreign exchange market for profitable purposes. Traders will buy some money to increase profits. These forex traders are called forex traders and, of course, they have experience and pay attention to various factors that influence the rise and fall of currencies in the world.

The world could not buy foreign exchange until 1944. For example, Americans who only had dollars could buy euros while traveling on European soil. Even when he has to pay for some of his needs, US dollars will not be accepted as a means of purchase.

In turn, in all international transactions around the world, the international gold price becomes the standard for all national currencies in international trade. Only after 1970 will it be possible to use US dollars as a payment method that will be accepted around the world.

forex trading system

Until recently, many people believed that forex was just a game or a game of chance. It is believed that no other currency activity is dependent on systems of fortune and prediction. This is not appropriate because forex also requires precision and some types of calculations and analysis.

Here are some of the things that affect the forex trading system.

mediator

The parties that “play” the forex, commonly referred to as traders, will manage and execute transactions that can be done on their own or using the services of a trusted broker. Brokers in this case not only act as intermediaries, but also provide tools such as security systems, separate accounts, transaction funds, etc. In this Forex trading process. This broker is also information for traders when analyzing the market.

Currency exchange rate fluctuations

Please note that there is no center or reference for currency values ​​in the foreign exchange market, forex / forex market. In other words, no individual, institution or organization can move the forex market unless the party has significant funds to change the market price, although the effect is not very great in the end.

Forex transactions can occur in the foreign exchange market due to fluctuations in exchange rates. The causal factors are different, such as economic shocks in large countries, geopolitical conditions, the presence of large ethnic groups, etc. This will lead to the concept of supply and demand. For example, when global conditions force many people to need the US dollar, the value of that currency will rise - and conversely, trading in too many US dollars will reduce the value of that currency.