What Is Forex?
Forex is the short word of “Foreign Exchange”.
Forex is the biggest financial market in the world.
According to Bank for International Settlement, in 2013, daily transaction of Forex is $5.3 trillions, comparing to, daily transaction of NYSE is only $1 billion.
Who Involves In Forex Market?
- Central Bankers
- Commercial Banks
- Hedge Fund Companies
- Import Export Companies
- Businesspeople and Tourists
- Speculator (like you and me)
5 Factors That Move Forex Market Up and Down
- Economic Factor (Inflation Rate, Interest Rate)
- Government Intervention
- Trading Balance (Import and Export)
- Natural Disasters (Flood, Famine)
- Political Factor (War, Election)
7 Major Currency Pairs in Forex Market:
What Is PIP?
PIP comes from the word: percentage in point.
PIP is the small movement in price.
- EUR/USD from move 1.3510 to 1.3511, it means price move up 1 pip.
- EUR/USD from move 1.3510 to 1.3520, it means price move up 10 pips.
- EUR/USD from move 1.3510 to 1.3509, it means price move down 1 pip.
- EUR/USD from move 1.3510 to 1.3500, it means price move down 10 pips.
What is Spread?
Spread is the difference between Bid Price and Ask Price.
Bid Price = Selling Price
Ask Price = Buying Price
Spread = Ask – Bid