The Advantages of the Foreign Exchange Market

July 20, 2015

Versed in software development and investing, Pablo Soria de Lachica serves as director of business development at BForex. At the currency trading firm, Pablo Soria de Lachica applies his expertise in market analysis and investing to help develop software aimed at investors across a broad range of skill levels.

Forex, short for “foreign exchange,” is the business of trading one currency for another. While forex trading carries risks, just like all types of trades, it also includes numerous advantages. First and foremost, the forex market remains open for 24 hours a day, every Sunday through Friday. This means that traders have access to up-to-the-minute prices all day, enabling them to position themselves for optimal trades the moment they are ready to make them.

The forex market also makes it easy to understand the price of trades. Forex trades are quoted according to two currencies: a base currency and a counter currency. Shown in pairs, the base corresponds to the currency on the left, and the counter to the currency on the right. For instance, EUR/USD lists the value of the euro to the US dollar.

Investors buy a currency pair if they believe the base currency stands a chance of strengthening against the counter currency. Similarly, investors will typically sell if forecasts call for a pair’s base currency to weaken against the counter currency.

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