Binary option trading is an excellent entry point into the world of trading. The next step is Forex. As we have understood, trading binary options is quite simple in its operation. Risks are controlled with losses only up to the investment. The gains are quite interesting with around 85% of possible profit on a position. The trading time is also suitable for non-professional traders with the possibility of trading with expirations between 60 seconds and several days. However, if you want to continue learning how to trade with more advanced tools and more binary options strategy, then Forex is for you. Let’s discover together the principle of forex trading, a simple definition and some quality brokers.
Definition Of Forex – Forex Trader
Forex is the shortcut for Foreign exchange: Exchange market. It is the currency market of each country. Speculation is made on the exchange rate between two currencies. We then speak of speculation on the evolution of a currency pair. The most popular currency pair is EUR / USD (euro / US dollar). Speculation, in this case, is about the evolution of the European currency compared to the currency of the United States.
If the EUR / USD currency pair displays a price of 1.10, this means that the value of 1 euro is equal to 1.10 US dollar. When you trade Forex, you do not buy a share of a company (Google, Facebook, Alibaba, etc.), but you speculate on the evolution of one currency compared to another. This is a huge advantage because it involves monitoring the overall situation of a country (or group of countries) to know the possible evolution of its currency. It is easier to follow the economic situation of a country and to detect elements likely to influence the price of its currency than to follow the situation of a private company.
Concretely, if you wish to speculate on the evolution of the EUR / USD Forex currency pair, you will have to follow closely the situation in Europe and the USA and detect the economic events which will have an influence on the Euro or the US dollar.