What’s Parity? One of the terms you will encounter most often in Forex concepts or in international financial transactions is parity. Whatis it? How is it used? How should it be evaluated? The article was written to give you brief but explanatory information on this subject. As it is known, the options you can trade and invest in the Forex market include exchange rates.
You will move at the exchange rates, but you will not be able to purchase or exchange real currency here. You will move through countries ‘ currencies and have the foresight to fall or rise, buy the expectation, sell it when it happens.
This means the value of the currency of any country versus the currency of another country. This is the simplest explanation of the word parity, the most understandable explanation.
The logic of trading on Forex exchange rates is defined as parity. In other words, you will compare the currency of one country with the currency of another country in the direction of value. How is it used? The most commonly encountered, the most preferred option in Turkey is the dollar Turkish Lira or Euro Turkish lira parity operation. What would that mean?
It means that the dollar gains or loses against the Turkish Lira or that the euro gains or loses against the Turkish Lira. You will shape investments through this understanding.
The use of parity in the Forex sector will come to you as a two-way transaction. Let’s give an example over the dollar Turkish Lira. If you think that the dollar at a certain unit price will lose value against the Turkish Lira as a result of predictions or research, this will actually be a move on parity. What are you gonna do? Imagine a unit price in the form of 5.97.
If you think this will break down, you will move and trade on the order in the form of sat. If you predict that it will rise to higher levels than 5.97 level or if you have found out with studies, you will act on the order in the form of al, i.e. you will be trading. As you will see, you will be acting on the value of one country’s currency against another country’s currency, and giving instructions on the parity transaction.
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