Forex is an international financial market where currency is exchanged. It was founded in 1976, when all the nations of the world abandoned the “gold standard” and adopted the Jamaican system, which promoted the free flow of currencies. Since then, Forex trading has become absolutely vital for the normal operation of the world economy and for ensuring the smooth flow of capital between countries.
Forex is an international over-the-counter (OTC) market, with no central physical location. Market participants conduct their transactions from anywhere in the world, through the use of electronic trading platforms.
Traders use Forex to exchange currencies and make high profit. They earn from the difference in exchange rates, which derives from the constant fluctuations of the value of the currency pair. For example, if you buy a euro today for $1.3 and its value tomorrow rises to $1.4, by selling the euro tomorrow, you will be able to earn $0.1.
Advantages of Forex
High yield trading
For many people, speculative trading has become a profession that brings them high returns. Trading in Forex gives them also the possibility to protect their funds against inflation, as this type of investment brings a real return, which is the return on their investment without the reduction in its value as a result of inflation.
Making profit regardless of the market trend
One of the biggest advantages of Forex is that it can be traded either on rising or falling rates. If the price of a stock in the stock market starts falling, the upward trend becomes bearish, meaning that its value will keep reducing, often bringing heavy losses to stock traders.
In Forex, a similar reduction in the price of a currency does not determine the overall trend decline in the market. It only means that this currency is going to be more expensive in relation to other currencies. This feature gives the possibility to earn on Forex, despite the direction of currency movements. Profit can be made both on increasing and on decreasing rates.
Round-the-clock opportunity to earn
Forex market is operating on a round-the-clock basis in all time zones, as there is not any specific trade centre. Therefore, you can trade on the difference in exchange rates at any time convenient for you (except during weekends, where trades are not conducted).
Trade from anywhere in the world
Forex trading is conducted through the internet by using a special software installed on your computer or any other mobile device. This makes it possible to trade from virtually anywhere in the world, provided that there is internet access.
Interesting trading process
Trading Forex is an interesting exercise that makes you constantly be aware of all international news and enhances your knowledge about the market operation.
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