Forex trading is an online platform for exchanging currency for a variety of reasons. Most commonly they are due to commerce, trading, and tourism. As you have read about the terms (FX, FOREX, FOREIGN EXCHANGE MARKETS) they all are interlinked and all refer to the Forex market. It is a world-wide facility for the pupils to get benefits from. It is a market where currencies are transacted.
Literature overview
As we all know that Forex trading is a completely new market. In a true sense, people are converting one currency into another for financial advantage. One unparalleled side of this market is that there is no central marketplace for foreign exchange. Specifically, currency transactions are controlled electronically (OVER-THE-COUNTER) which means all the trading is going to occur via computer. The market is open 24 hours a day, and five and a half-day a week around the globe.
Spot market and future and forward markets.
They are actually three ways that institutions, corporations and forwards market, and the futures market. In spot market is a public financial market in which financial instruments or commodities are traded for immediate delivery. The forwards and futures do not trade actual currencies. Whereas the futures market is a standardized forward contract.
In Forex trading we can do investments to other countries. By sitting in PAKISTAN or INDIA we can order things. It a big platform for online shopping, through this our currency is exchanged into other countries’ currency which is specifically (RUPEE). Another benefit of Forex trading is that we can confirm our traveling structure. One can do investments by trading.
An investor can profit from the difference between two interest rates in two different economies by buying the currency with the highest interest rate and shorting the currency with the lower interest rate.
How does it work?
When Forex trading you will see both “bid” and “ask” prices are quoted. The bid price is the price at which you can buy the currency, while the asking price is the price at which you can sell it.
What are the benefits of Forex trading?
There are a variety of reasons why people choose day earning. Most important of all is to earn extra for their own benefits as well as for home, and the chance to learn something in their free time, or even the dream of achieving financial freedom and having more control over the financial future.
FOREX: World’s largest financial market
It is the world’s largest financial market; over 5.09 trillion USD traded every single day. Being the largest most active financial market over the globe, it is also known as the world’s most liquid market, meaning it is easy for the traders to enter and to exit whenever they wish for. It is also very volatile, creating opportunities for the traders to make a profit on both positive and negative movements of currency pairs.
TRADE TWENTY FOUR BY SEVEN:
Forex is the trade that never sleeps, meaning you can transact any hour of the day. Keeping both INDIA and PAKISTAN in mind one can say that trade is almost the same for both the countries as well as easy because having the same currencies.
Consequently, it never restricts other businesses during progress. So, as is a global market so there are some of the locations which are still up to do trading while we are sleeping.
SPECULATE ON RISING AND FALLING OF PRICES:
One of the most important aspects of trading is to buy low and sell high- this is particularly in case of long term investments, such as in investing bonds and stocks, which rely on asset increasing in values. In Forex trade you can also sell high and buy low. This way you can gain profit from both downwards and upward trends.
EASE OF ACCESS:
As it is the most trending trading market in terms of technology. While many markets are old-fashioned trading platforms, there is a constant race to be on top.
CHALLENGES:
While trading you need to get full knowledge of economic fundamentals and indicators. Currency traders should have a great understanding of the economics of the world. Banks, brokers, and dealers in the Forex market allow a high amount of leverage, which means that traders can control large positions with relatively little money of their own.
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