Traditionally stock market received huge share in the trading industry, but recent trends show that Forex) trading or currency trading is breaking that tradition. . OTC market and Spot market, is world’s biggest market having daily turnover of over 3.2 billion US Dollars more than all other trading markets combined.
Forex or Foreign Exchange, the forex market or Currency market came into existence after the relinquishment of the Bretton Woods accord in 1971 and later abandoned the regime of universal fixed exchange rates. The triennial survey conducted by the Bank of International Settlement (BIS) shows that global forex trading or currency trading turnover amounts to more than $3000bn per day.
Forex or currency trading is not only the domain of governmental (central banks) and institutional (commercial and investment banks), the forex market is also the jurisdiction of non banking international corporations, hedge funds and individual private investors and speculators. Internet has enhanced the currency trading. especially for individuals investors.
Forex trading or Currency trading has short term as well as long term benefits and opportunities but without proper training and knowledge forex traders are vulnerable to risks, therefore great care need to be taken before any venture is undertaken
Forex trading for private investors surged after the advent of the internet. Best investment for forex is sound and practical education with experience. ForexTradingEvo help us to make knowledge regarding forex or forex trading.
Forex trading or currency trading has seen rapid growth in trade, as equity and futures traders become aware of the approaches they have been using for years in their respective markets, especially price based techniques based or technical and quantitative analysis are equally applicable to Forex.
From a price action perspective, it’s inclined towards strong tentative trends.
Over 80 percent of forex trading or currency trading is speculative, as a result it mostly over react.
Market Regulation.
Forex or currency Market is most lightly regulated. There is no regulatory authority. However, Federal Reserve Bank of the US do provide some degree of oversight. As compared to stock or bond trading Forex or Currency markets are least regulated.
Medium:
Internet is the medium of forex trading or currency trading. First the investors have to open their account through Broker and send their capital through wire transfer, like Western Union or bank cheques to their Brokers to open a live trading account. They can soon start trading once the amount is credited into their accounts.
Forex Broker
For investors to trade inter-bank forex market, a Forex Broker firm provides all the arrangements. Forx broker firms have huge trading turn over by their clients. Their interest is only limited to the spread and they charge no commission. The difference between buying and selling price of a currency pair is spread, If the spread on a currency pair in the inter bank market is 2 pips(a pip is the smallest unit of a lot, if the rate of buying rate of a pair is 18241, the last digit �1’ is a pip) regardless of any outcome of a trade such as profit or loss the Broker will charge 3 or 4 pips on each roundabout trade.
Merits of Forex Trading
1.Forex traders or Currency traders do not have to wait long time to cash their investment, since they directly trade in real money
2.leverage of up-to 1100 US Dollars. To benefit from a lot of US$ 10,000 you only need to invest US$ 100, Remaining amount is leveraged by Forex Broker.
3.Currency Market is a 24/5 trade. Markets with highest volume trade occur at Londong time, New York, Tokyo in descending order.
4.In Forex Market you can profit from both ways. When the currency pair is going up and also when its going down.
5.You have total control over market. You decide to how much you target to profit and how much to loose. If the market trend is against you, the only thing you do is to take a day off,
6.You don’t have to pay any commission to Forex Broker.
Demerits of Forex Trading
1.Forex Trading is a highly volatile market, that offers huge profit as well as a great loss. Always your loss will give profit for someone else.
2.Leverage works both ways. Its like a weapon that’s not in your control. It helps traders to benefit from a lot size much greater than their investment, but it also exposes them to the losses of same proportion.
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