subject: FOREX TRADING IN INDIA [print this page] FOREX TRADING IN INDIA FOREX TRADING IN INDIA
Forex trading is all about trading of national currencies. Forex trading is done by brokers and market makers. In this foreign currencies are simultaneously or constantly bought or sold across local or global stock market.
It's all done by forex stock exchange. And they can change their rules and terms any time according to movement in currencies.
Forex trading is a non stop trading, this trading continuous for 24 hour / 5 days a week. The volatility in market gives more profit opportunities to forex traders. There are many option available in forex trading for 0 commission trading.
How forex trading takes place?
We can better understand the work of forex trading with the following example:
For example, the exchange rate of EUR/USD on Aug 26th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier.
HOW GOOD INVESTMENT BY INVESTORS IN FOREX TRADING WILL BE CALCULATED ?
Best way to compare the investment by various investors and to select good one from that is to compare their trade with another alternative investment options. At the minimum level the return on investment should be compared with return on risk.
WHAT ABOUT BUYING AND SELLING IN FOREX TRADING ?
In forex trading buy that currency whose price you think will increase in comparison to selling currency. When you will see that the price of currency which you have bought is going high you should sell back the other currency and book the profit.
Forex market is speculative market so one should be more careful while trading in FOREX because the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.
So, if one is in his/her initial stage in FOREX trading it is better for him or her to take help of an advisory firm.
