Foreign Exchange or Forex is a trade dealing with all the currencies of the world. The Forex market is the largest in the world transacting currencies worth to the tune of about three trillion dollars a day. The Forex market is not controlled by any central exchanges like the stock market. The main centers from where the Forex trade can be conducted are New York, London, Tokyo, Sydney and Frankfurt. This worldwide operation of Forex has made it a 24-hour trading market.
A currency trade is effected by buying one currency and simultaneously selling another. Such a combination of currency trade is known as 'Cross'. The 'Spot' market has the largest volume. They are called spot market because the trade is completed on the 'spot', but the actual transaction of funds take two banking days. The Forex market allows you to buy and sell currencies worth much more than your deposit and this is called 'Margin' trading. The opportunity to trade 24-hours-a-day, gives you the advantage of reacting instantly to any news that could possibly affect the market sentiments. One major advantage of trading Forex is the liquidity of the market, especially that of the major Currencies, helps ensure narrow spreads and stability of prices. This liquidity is provided by the banks to the investors, companies and other market players.
Also the Forex can be traded without any commission. This provides an attractive investment opportunity for market players who want to trade frequently. Since the value of the currencies is frequently changing, there are always trading opportunities for a shrewd trader. The currencies almost work against each other. When one major currency declines, another major currency gains strength. With so many advantages, Forex trading certainly provides ample opportunities for investors, provided the investor exits the market immediately on booking profit.
A currency trade is effected by buying one currency and simultaneously selling another. Such a combination of currency trade is known as 'Cross'. The 'Spot' market has the largest volume. They are called spot market because the trade is completed on the 'spot', but the actual transaction of funds take two banking days. The Forex market allows you to buy and sell currencies worth much more than your deposit and this is called 'Margin' trading. The opportunity to trade 24-hours-a-day, gives you the advantage of reacting instantly to any news that could possibly affect the market sentiments. One major advantage of trading Forex is the liquidity of the market, especially that of the major Currencies, helps ensure narrow spreads and stability of prices. This liquidity is provided by the banks to the investors, companies and other market players.
Also the Forex can be traded without any commission. This provides an attractive investment opportunity for market players who want to trade frequently. Since the value of the currencies is frequently changing, there are always trading opportunities for a shrewd trader. The currencies almost work against each other. When one major currency declines, another major currency gains strength. With so many advantages, Forex trading certainly provides ample opportunities for investors, provided the investor exits the market immediately on booking profit.
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