What is forex trading?
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ill give this one a go, maybe someone can add to it.
So first, I think its best to acknowledge that there is a Forex that is a real financial exchange. And then there now seems to be random MLM looking people trying to get your money on social media advertising getting rich on ‘forex’. What these people mean by forex, or what they do, I am unfamiliar with. However, rule of thumb, don’t give your money to people that are asking for it online, and don’t give your money to anything you dont understand.
As for the real Forex, it stands for Foreign Exchange, and simply put, it is just the exchange of different currencies.
So, the most basic example of Forex, if you have a vacation coming up in Mexico, and you go to the bank and exchange your United States Dollars for an equivalent amount in Mexican pesos (less the fee the bank charges) You exchanged currencies. That is Forex.
But how do you know how much $10 of United States Dollars is actually worth in Pesos? In actual real buying power there is a real value difference between $10 USD and $10 pesos. So in your Forex exchange, your $10 will give you roughly $185 Pesos. Based on today’s forex (exchange rate)
However, the relative value between USD and Pesos is not always the same. How many Pesos your $10USD is worth changes over time based on all sorts of political, macro economic, and other factors.
So because this value is always changing, that brings us to the Forex that most people think of. Large banks and money institutions that exchange between their money between currencies, trying to buy currencies when the value is low, and hold until the value is higher. (similar to stocks in a way)
An example would be, that as of today, the exchange rate from Euro to USD is 1.07. Meaning, roughly one Euro and one USD equal each other. However, historically, One Euro has usually been worth more that one USD. So if a bank or a forex trader guesses or predicts that the value of the Euro will increase (compared to the USD) he will exchange all his USD into Euro, and then wait for the Euro value (compared to the USD) to increase. Once it increases, he can exchange it back to USD and now he has much more USD than when he started. That is Forex trading
ill give this one a go, maybe someone can add to it.
So first, I think its best to acknowledge that there is a Forex that is a real financial exchange. And then there now seems to be random MLM looking people trying to get your money on social media advertising getting rich on ‘forex’. What these people mean by forex, or what they do, I am unfamiliar with. However, rule of thumb, don’t give your money to people that are asking for it online, and don’t give your money to anything you dont understand.
As for the real Forex, it stands for Foreign Exchange, and simply put, it is just the exchange of different currencies.
So, the most basic example of Forex, if you have a vacation coming up in Mexico, and you go to the bank and exchange your United States Dollars for an equivalent amount in Mexican pesos (less the fee the bank charges) You exchanged currencies. That is Forex.
But how do you know how much $10 of United States Dollars is actually worth in Pesos? In actual real buying power there is a real value difference between $10 USD and $10 pesos. So in your Forex exchange, your $10 will give you roughly $185 Pesos. Based on today’s forex (exchange rate)
However, the relative value between USD and Pesos is not always the same. How many Pesos your $10USD is worth changes over time based on all sorts of political, macro economic, and other factors.
So because this value is always changing, that brings us to the Forex that most people think of. Large banks and money institutions that exchange between their money between currencies, trying to buy currencies when the value is low, and hold until the value is higher. (similar to stocks in a way)
An example would be, that as of today, the exchange rate from Euro to USD is 1.07. Meaning, roughly one Euro and one USD equal each other. However, historically, One Euro has usually been worth more that one USD. So if a bank or a forex trader guesses or predicts that the value of the Euro will increase (compared to the USD) he will exchange all his USD into Euro, and then wait for the Euro value (compared to the USD) to increase. Once it increases, he can exchange it back to USD and now he has much more USD than when he started. That is Forex trading
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