Forex trading does it really work

Does firex tradingnrealky work, is not a dumb question as it may appear.Because of the fear of losing money, one may ask these questions which include “does forex trading really works?”  Well the answer is yes, it works perfectly, and many have benefited a lot from forex trading. Now we will have to look at the reason why we say it actually works

WHAT IS FOREX?

Forex is the market in where currencies are traded.  The forex market is a very large and also the most liquid market, forex trade has a trading value of over trillions of dollar which can be made per day, not just dollars forex trading includes all the currencies in the whole world, that is why it is considered as the biggest marketing the world for trading of currencies.There is no essential marketplace for forextrade, though it is conducted over the counter. It is open 24 hours every day, and atleast 5 days in a week, holidays in exemptionCurrencies are traded worldwide amid the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.

FOREX TRANSACTIONS TAKE PLACE ON EITHER A SPOT OR A FORWARD BASIS.

SPOT TRANSACTIONS

This type oftransaction is mainly used for forinstantaneous delivery, which is defined as two business days for most currency pairs.The business day calculation excludes Saturdays, Sundays and holidays in either currency of the traded pair. During the Christmas and Easter season, some spot traders can take up to six days to clear up. Funds are exchanged on the day of settlement and not on transaction day.The U.S. dollars (USD) remain the most vigorously traded currency. And the Euro is the most enthusiastically traded counter currency which is followed by the Japanese yen, British pound and also Swiss franc.

FORWARD TRANSACTIONS

Forward transaction as the name implies settles for a date later than spot.  In forward transaction the price is calculated by adjusting the spot rate in order to account for the difference in the interest rates between the two currencies. The adjustment amount is known as"forward points."Forward point reflects only on the interest rate differentials between two markets.

FUTURES

Futures are also a type, which is traded on an exchange, and can be executed for a particular amounts and dates. With a future contrast, the buyer pays a portion of the value of the contract up front. The value is marked to market on daily bases, and the buyer will either pay or receive money with the change in value.

ADVANTAGES OF FOREX TRADING

- ACCESSIBILITY:

You can start trading Forex with a relatively small amount of capital and this is truly one of the main benefits of Forex.

- LIQUIDITY:

There is a constant supply of money and demand for money. One of the benefits of Forex trading is that the market is open 24/5. This means that you do not have to adjust your schedule for the market opening hours, as you can trade all day long.

- TECHNOLOGICAL DEVELOPMENT:

Advancing   Software is absolutely one of the most important benefits of Forex trading. While most futures, stock and option brokers supply you with platforms that were developed years ago, Forex brokers provide the newest trading platforms. There is also a great amount of third party software suppliers that provide useful trading extensions.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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