Nowadays, the different ways that people have to manage money are extremely interesting, because each one of them in one way or another promotes the local economy. If we speak in terms of personal finance, we will realize that it becomes a starting point to what is an economic system much larger than we can imagine.
And, only with the basic financial activities that a person can carry out, in terms of investment what capital, control of liabilities, as well as assets, a wide spectrum of economic activities is promoted.
In terms of Finance, there really is a lot to talk about, but today we come to talk about a somewhat curious topic for many: currency prices. Many wonder how a particular currency can have a specific price, and although the subject may be a little simpler than you can imagine, it can really be condensed into one word: Forex. See below what we have to tell you about the currency market.
Talking a little more about Forex
Forex, is a foreign exchange market that is fully decentralized. In fact, it is the forex market; We comment on it since it is basically the only one where the different currencies are handled and traded worldwide, which can be quite impressive considering that this market is totally decentralized. In other words, no government or financial entity can control what happens in the foreign exchange market or the different prices that each of the currencies have.
The purpose of this market is to facilitate the monetary flow derived from international trade. And, in fact, although it may surprise many, it is worth noting that this is the largest financial market in the world. Only in one day, within this market, transactions equivalent to more than five trillion dollars are carried out, and that is only in an ordinary day.
This figure is greater than the transaction volume of all the other stock markets that exist today together. In fact, this market is so large, that only when talking about operations in foreign currency, in order to obtain different goods at an international level, we find that its volume is basically residual, since most of the sales that are made are of financial assets .
What is Forex
Due to the latter, the market turned out to be quite independent when talking about the different real commercial operations that are carried out, and the variations that exist in the prices of a currency pair cannot be explained in an exclusive way due to the great variation of trade flows.
In order to be a forex trader, you must have a lot of things in mind. For example, if the day comes when a large company like Intel must pay the payroll of its workers worldwide, it will see a large increase in different currency pairs, since the company must buy other currencies to make payments.
abroad. Only the latter is one of the many aspects that must be taken into account in a normal day within Forex. So just by multiplying this transaction a million times, we can get an idea of the level of transaction flow in the market.