Forex is the acronym of Foreign Exchange. FOREX has now become one the most prolific areas of investment when it comes to currency trading. Moreover it denotes the exchange of one country’s money or currency with other country.
As currency trading is the biggest market of investment in the world but the trading needs a lot of understanding. The person must have a thorough analysis of market and a strong sense to judge the potential value of a currency. Most importantly, a successful trader or Forex Broker must have the capability to interpret different Forex trade signals.
Here, the exchange is basically done between the banks, non-banking corporations, private investors and speculators.
There are many nations which have their own national currency such as the US dollar, the UK pound e.t.c and also it is very much necessary for them to make payments for importing goods and services from other country's borders. So with the increase in trading with one another, foreign currency is required to pay for cross-border import-export of goods and services. This complies that there must be some mechanism which should be drawn in order to provide access to foreign currencies, so that payments can be made in a form that is acceptable to the seller, and thus this leads to the need for a foreign exchange market for trading foreign currency.
Forex over the counter trading involves substantial risk of loss and is not suitable for all investors. Using leverage in foreign exchange trading may lead to a loss in excess of margin or deposits; therefore, do not invest money you cannot afford to lose. Past performance is not necessarily indicative of future results. You should be aware of all risks associated with foreign exchange trading.
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