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What is Forex?
In this video, we take a look at what the largest financial market in the world really is. We will be covering where the term Forex is derived from, what do “Long/Short” positions mean and how to trade on the market.
We will be also covering why currency exchange rates fluctuate and how traders usually analyse the market.
The term forex is derived from two words, “Foreign and Exchange”. It is used to refer to the market where currencies from around the globe are being traded. What is fascinating about the forex market is the fact that when you buy a currency, you are also selling another currency at the same time.
If you go long on a position it means you are buying a currency and hoping its price will go up so you can sell it with a profit. When you sell a currency like the EUR, it’s also called going short and it means you are hoping for its price to fall, with the goal of buying it back at a lower price.
Currency exchange rates are constantly fluctuating due to various economic or geopolitical factors that are playing out all around the world every day. For a forex trader, this constant rising and falling in the exchange rate is good as it represents profitable trading opportunities. If you are able to determine the direction of these fluctuations, then you will get the chance to profit from the constant price movements.
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