Simply speaking, ‘forex’ stands for foreign exchange or
foreign currencies. Therefore, Uk forex trading is the business of buying or
selling of currencies. So far, this has stayed the world’s biggest financial market with a
turnover of five trillion USD and the market involves traders and brokers and many
currencies. As the trade includes purchasing one currency in exchange of
another currency, the
trading takes place using “currency pairs”.
How does FOREX TRADING work?
Best Forex Trading takes place in various types of currencies. As a
trader, you would get the option to do trading in more than 80 currencies. The most traded currency pairs are famous as “majors”. The “majors” constitute about 85% of
the whole foreign exchange market. The currency pairs, which do not include
USD, are commonly familiar as “cross currency pairs”. In the third category,
the market also has exotic currency pairs, which consist of one major currency and a
currency of an
emerging economy. Forex is a decentralized market in the world, where the
trading of all the currencies takes place. As a trader, you need to speculate
on the rising and falling values of the currencies and trade accordingly. If the price
of a particular currency appreciates, you make a profit from the rate of exchange from Forex Trading UK.
How do you begin trading?
i. First of all, you need to open an online forex trading account
and deposit money in that.
ii. For regular trading, you could login and begin Best forex trading
by means of spread betting, CFDs, or spot FX. Then you could move to
pick up your pairs and start by opening a position.
iii. You could get access to live price feeds, streaming
charts, and news in an instant and do trading throughout the day.
How does foreign currency rate get fixed?
The currency exchange rate is the exchange price at which
one currency gets bartered for another currency. As it is well-known, the
trading takes place between pairs, the majors are USD/EUR (US dollar and Euro),
USD/GBP, and USD/INR. When the exchange rate of a particular currency
rises, you make profit by trading and learn more at Platinum Trading Academy. Best Forex trading is same like that of equity
trading. When you do equity trading, price of the share is really important and in forex
trading, exchange rate of pairs of currencies carries highest importance. But it
needs to be borne in mind that forex trading involves high risks and it could result
in loss. Let’s understand one example of forex trading mentioned
below;
i. For instance, you want to take benefit from the rising
price of USD. A single USD is getting traded at 64 rupees at present. You speculate
that the price of the dollar would rise to Rs 67 in the next three months and
for this, you enter inside a long position by making a purchase of USDINR
contract on the exchange. If the exchange price of the USD rises to meet
your expectation in future, then certainly, you make a profit of 3 rupees per
dollar and by trading 100 USD, you could a gain of approximately three thousand
rupees.
