EURCAD STARTS STRONG

WHAT IS FOREX TRADING?

Trading Forex is all about observing the markets, the currency pairs and their respective values over one another. If you can predict the direction of the market, you profit. It’s simple as that. You open either a long (buy) or short (sell) position, assuming the currency’s value will either go up or down. As millions of other Forex traders open positions just like you, the price is set as a collective result of everyone’s positions.

Think of it as a ‘tug of war’ where millions of traders are holding a rope. One side is buying, the other side is selling. When a trader opens a position, they join a team and grab one end of the rope. When happy with the current price, they close the position and thus ‘let go’ off the rope. Their current positions define the live price of the currency.

Without an official regulator or state involved, this is pretty much how the pricing is determined. But not everyone has the same amount of investment, or as in our analogy, the same muscle strength! Larger investors will definitely impact the direction and the pricing of markets slightly more than others. Still, the market is so deep that even the largest players can never shape or corner it.