The important thing when investing in the Forex market is that you keep in mind that it will appreciate if the base currency (the first of the pair) appreciates with respect to the quoted currency (the second of the pair, also called the counter currency).
Otherwise, if the listed currency appreciates or the base currency depreciates, the pair will drop in market price.
The Trade market is open 24 hours a day from Sunday night to Friday night. The quotation of the different currencies constantly changes during this period.
Investors in the Trade 500 market can carry out their operations regardless of whether the exchanges are open or closed at that time of day.
Unlike other markets, they can react immediately to economic news or events that happen on the geopolitical plane without having to wait for the market to open.
There are movements in the prices of currency pairs throughout the day, coinciding with the trading hours of:
- The Asian session
- The European session
- The American session
When some financial centers are closed, others remain open. In this way, the Trade market does not stop working. The European session, for example, coincides in the morning with the Asian session and in the afternoon with the American session, according to Spanish peninsular time.
In any case, although Trade does not depend on the stock markets, it is affected by greater liquidity and volume of movements coinciding with the opening of the world’s main exchanges: Tokyo, London and New York.
In this article you can see everything related to the schedules of each of the sessions in the Trade market: Schedule to Invest in Trade
Why do currency values fluctuate?
The fluctuations experienced by currency pairs – and which we can take advantage of as investors – are generated by various causes, mainly by real monetary flows and expectations of changes in global macroeconomic conditions.
As in other markets, there are a number of variables that influence currency fluctuations in Trade, such as the GDP of a country or region that operates with a specific currency, inflation, the evolution of currency rates interest, the unemployment rate, the trade surplus or deficit as well as political news and rumors that affect the psychology of the market itself.
To put it in some way, a currency crossing is like facing the economies of two countries (the issuers of the currencies that make up that pair).
Macroeconomic causes, political events, conflicts, trade issues, etc., affect a currency (for better or for worse) and this is noted in the pair (which can be appreciated or depreciated).
You can see more information about the factors that affect the exchange rate in this article: Factors that influence the currency exchange rates in Trade
In addition to the fundamental factors (economic and / or geopolitical causes and news), currencies fluctuate due to supply and demand and depend on investors’ expectations.
How can currency fluctuations in the Trade market be predicted?
To try to predict the behavior of a currency pair in Trade, most investors are divided into 2 groups according to the type of analysis they perform:
Fundamental analysis: used by investors who operate in Trade generally in the long term and based on economic variables, macroeconomic data (interest rates, unemployment rate, inflation, etc.).
The different economic news that happen on a daily basis have a greater weight in this type of analysis.
Technical analysis: generally used by investors who trade Trade in the short and medium term and which is based on charts with the historical value that a specific currency pair has taken, in which it is necessary to look for trends and formations with the help of indicators based on mathematical formulas, statistics, etc.
Technical analysis tries to predict future movements in currency prices based on analysis of supply and demand. If you want to learn how to carry out this type of analysis, we recommend that you take a look at our technical analysis manual.
What do I need to start investing in Trade?
Currently, most financial investments are made entirely online.
To invest in Trade through the Internet, all you need to do is create an account and access the investment platform of an online broker.
An online broker is an intermediary company authorized to trade currencies on the Trade market on your behalf.
It is in charge of executing the operations of purchase or sale of currencies that you request, in exchange for a commission (called spread that is based on a small differential between the purchase price and the sale price).
As it is an online broker, the great advantage is that we can carry out the entire process ourselves through the Internet and from anywhere with a computer, a mobile phone or a tablet.