Forex & Currencies Trading
Reviewed by Aug 27, 2020| Updated on
What is Forex & Currencies Trading?
The word forex, also known as FX, is an abbreviation for foreign exchange. Foreign exchange refers to an act of changing one currency from into another for various reasons grouped as trading or tourism. Hence, currencies are traded in the forex market. There is no central place for this market. Still, it is traded over-the-counter internationally and runs 24x7, not bound by time. The price quotes change regularly and it is one of the highly volatile markets. It must be noted that forex is one of the largest traded markets across the globe.
A typical example of forex trading is where an Indian importer wants to convert Indian rupees into US Dollars for paying the US supplier. More casually, a person travelling from India to the US must hold US Dollars during his stay in the USA.
There are multiple ways of trading in forex. It includes forward and futures markets, hedging, and speculation.
What are the advantages of Forex & Currencies Trading?
Some of the advantages of trading in currencies and forex are as follows 1. Forex trading offers one of the highest liquidity. It allows traders to take and leave positions flexibly. 2. The market in forex is open for 24x7 trading, giving broader scope compared to any other market. The day begins with trading in Australia and ends in New York. 3. Forex market is open for anyone without any restrictions of type or category of traders. 4. The transaction costs are low and there is an ability to trade on margin.
Who should consider it?
Anyone interested in making money which is serious and disciplined in following forex or currency market may make profits in Forex trading.
There are several factors to consider that affects the earnings through the forex market, such as trading style, account size or exposure, and other external factors.
Most lately, the foreign cryptocurrency exchange market is the emerging currency market across the globe. The cryptocurrencies have increasingly become popular in recent years with traders.
Also, it is a payment tool that blends both speed and reliability. As cryptocurrencies are widely sought after, innovation has taken place to meet traders demands for fast and secure payment systems.
Forex or currency market is the easiest to access for any interested trader without any restrictions for at the time of enrolment for trading. Hence, it is recommended for those persons eager to make profitable earnings in the currency exchange.