We have learned the concept of Foreign Exchange and each and every nation is connected with this phenomenon. Furthermore, after India liberalised its economy in the 90’s the concept of the Foreign Exchange is doing the round on a large scale. Let us break down the complex concept of Foreign Exchange as this is a unique process of exchanging the currency of one nation with another nation.
If you consider the case of the Free Economy, the currency of a nation is valued as per the rules of the demand and supply. The value of a currency is decided by the government of that nation. Another name for trading in the Foreign Currency is known as the Forex Trading Techniques.
Most of the participants in the markets will be the International Banks like Bank of America, Indian Overseas Bank, HDFC Bank, Axis Bank and others. A financial centre is a location dealing with various trading done with huge range of various sellers and buyers working day and night except weekends.
The foreign exchange markets work through various financial establishments and works at various levels. There are many dealers entering into the markets, to undertake huge foreign exchange trading. Most of the foreign exchange dealers are the banks available in India and there is an interbank market. Foreign Exchange is also known as Forex or FX in the financial and banking world.
Let me explain the concept of interbank markets, where in the banks exchange for various currencies. The bank can deal with a single or using various electronic foreign exchange platforms. Furthermore, the Electronic Broking Services (EBS) and the Thomson Reuters are the major competitors in the scene and has more than 1000 plus banks under its control. The currencies of developed nations will have their unique floating rates and they do not have fixed values and they tend to change from one place to another.
International Trade is a sweet combination arising out of exchange of products, good and services across the boundaries of various nations in the world. If you look at the foreign exchange analysis, a person will purchase one quantity of a currency and pay with quantity of another currency.
The foreign exchange market has begun during the 60’s and the 70’s and later onwards due to enhancement in the International Trade, it said to have reached around 8.8 trillion Dollars. Furthermore, it is highly sensitive in nature and has the highest risk exposure in the current scenarios.
To be honest the forex trade is not everybody’s cup of tea and it will be a tall mountain to climb for the beginners.
The Indian Government has introduced various rules on undertaking the currency trading and they are given below as follows.
There are various step by step guidelines for the beginners willing in to invest the amount in India and they are given below as follows:
Advantages of Forex trading and investment
Some risks with Forex trading
We must be very careful in handling the foreign exchange and it is fast becoming a good career option for all. It helps in earning profit; however, a person must be mentally strong to start the foreign exchange or forex trading as it can be compared to a sword with double sharp edges. You must know to attack and defend your hard-earned money.
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