What is currency market in Forex?
My answer will be
in a word “Currency”
.
My
answer is currency because you are not buying anything physically. This trading
is a little bit confusing.
Buying
a currency of any country is like buying stocks of a company. When we buy the
yen of Japan , the price of
the currency directly reflects what the market shows about the current and
future condition of the economy Japan .
When
you sell the USD, you are originally selling a "share" in the economy
of United Sates. Your trade means that, the American economy is not doing well,
and will get worse as time passes. Once you buy those "shares" back
to the market hopefully, you will end up the share with a profit.
In
short, the exchange rate of a currency versus the currency of any other country
shows the economical condition of that country, compared to the economy of
other country.
Currencies which are mostly traded
in Forex Market :
|
The
first three letters means the name of the currency, the first two letters
symbolizes the name of the country and the third letter indicates the name of
the currency of the country.
Take
NZD for instance. NZ stands for New
Zealand , while D stands for dollar. The
currencies remarked in the chart are called the "Majors" because
these are the mostly traded ones.
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