Maybe you’ve travelled or will travel to another country, this will help you understand what FOREX is. Before arriving at your destination you packed all the things you need; camera, snacks, toothbrush, and of course all the clothes! But with this, comes to mind the currency. The currency is the money we use in the country we live (or visit). But, what if we want to buy something in another country and we only have our currency? We need to exchange it.

How does it work?

Let’s imagine that you need about 450 American Dollars for one week to spend on the San Andres Island inColombia. You will need their currency called Colombian Pesoto pay for food, tours, because scuba diving or swimmingwith dolphins are among the ultimate beach experiences; and ofcourse, to buy souvenirs.

At the airport, you will give those 450 AmericanDollars, and in exchange, they will give you 1,200,000 (1.2Million) Colombian Pesos. It's also important to keep in mind that when you exchange your few hundred dollars for millions of pesos, you aren't exactly a millionaire by any stretch. While it's true that your American dollar will go a lot further in Colombia than it would back home, it's also important to have an understanding of just how much your currency is worth.

So, what does FOREX mean?

FOREX, FX, or Foreign Exchange Market, is the market where currencies are traded, and it is the biggest market in the world. Just in January 2015, an averageof $5,310,000,000,000, a day was traded. Instead, theStock Markets made less that $100 billion, a number withless zeros in it.

Why is it a good market?

Sometimes a currency is worth a lot of money. An American Dollar can be exchanged for 0.7 PoundsSterling. But, the next day it can be worth less money, so for each American Dollar you can just get 0.5 PoundsSterling. If you would have been able to predict that the Sterling Pound is devalued (down), selling it could have netted you the difference.

It is important to know the right time and currency to buy or sell. The currency value changes everyday.

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