Is the traffic light red or green? Are we standing in place or moving, and in which direction? Is the person walking towards us in the street an acquaintance or a stranger? Every day, we answer thousands of questions such as these, and the answers determine how we perceive reality and the degree of success with which we function therein, states IronFX.
Our ability to do this, sometimes within a fraction of a second, is taken for granted – but actually involves complex cognitive sensory information assimilation and decision-making processes according to IronFX.
The research of decision-making, which includes behavioural economics, is becoming more and more important in the world of finance and investments. Particularly when the internet in all its glory is brought into the equation, with its amazing ability to provide us with financial data at such great speed, on a worldwide level, at any given moment.
Independent investors are privy to financial activity taking place halfway around the world, states IronFX, with no need to install complex financial systems. The flow of information is huge and accessible on any computer, tablet or smartphone device.
Forex exchange is one of the fields where decision-making takes place during the flux of information coming from all directions.
Forex, (Foreign Exchange) simply put by IronFX, is the trade of currencies on an international level. This means that any currency can be traded for another, anywhere in the world, in Forex marketplaces. For example, Dollars can be exchanged for Euros, Pounds Sterling for Euros, Yens for Turkish Liras, and so forth. Forex deals can be made from either short or long positions – meaning, the purchase of a currency for another which is expected to go up or down as per the designated currency.
According to several investors, trades can be very volatile and erratic, and influenced by the slightest global change, with thousands of parameters impacting the trade – political, security, and economic situations. Terror attacks reportedly have immediate implications to markets, while Euro interest rate changes can immediately influence currency exchanges, IronFX reveals. A comment made by a President or Prime Minister can mean a shift in political and economic power balances which directly affect exchange rates. Changes in commodity prices, stock prices, and macro data immediately influence exchange rates as well.
According to IronFX, the Forex market is considered the biggest market in the world today, active 24/7 – twenty four hours a day, 7 days a week.
This area is still developing and evolving, and it holds a growing number of traders, investors, importers and exporters, speculators, and more.
Many emphasise that despite market challenges they have made substantial gains. Forex trading can be risky for those getting involved without learning about it but for those who study and understand its function, significant gains have been borne from this understanding. There are however, several investors who are “on the fence” and don’t really understand the implications of Forex trading.
Pro traders insist that activity in the Forex marketplace requires skill, knowledge, and understanding to yield a marked return on your investment. As some investors say, if one acts as a gambler, they have a good chance of coming away with significant losses. However, if one does his research and takes time to gain an understanding of the market the benefits and opportunity for future positive investments can be huge, reports IronFX.