Forex trading contains a lot of stigmas. It can become grueling for traders who don’t know what to do and how to do it. The world of forex can become an ocean for most people. This blog aims to provide the necessary push a participant requires in foreign exchange trading. Before jumping into the nitty-gritty, let’s understand the basics.
What is Forex Trading?
Forex trading, otherwise known as foreign exchange trading, is a type of trading method to earn profits. It forms one of the most crucial concepts that finance can deliver. In foreign exchange trading, traders buy and sell currencies in open markets regulated by sophisticated authorities. This buying and selling of currencies can drive the prices up and down. It is the largest marketplace, in terms of money flow.
The forex market contains different players. Be it the governments, banks, corporations, and individuals. As the currency prices keep on changing, the market is open 24/7. There is billions of dollars worth of forex exchanged every day. Therefore, due to the huge money flow, forex trading is also stretching its arms into India.
Forex Trading in India
For many years, people in India only dreamt of owning forex. This dream became a reality after the Foreign Exchange Management Act (FEMA) 1999. Thanks to this act people in India now can do forex trading.
It also made RBI and SEBI to act as watchdogs. Meaning, that any nefarious activity will be dealt by them. Forex trading in India is done through exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange). These two exchanges ensure the flow of liquidity and regulation in markets. However, there should be certain benefits or advantages of foreign exchange trading.
5 Advantages of Forex Trading
One of the reasons to enter into forex trading is to earn profits. But wait! There are plenty. So, a list of the 5 advantages is given below:
Volatility is an Opportunity
Volatility is the havoc created before or after an uncertain event. Volatility can alone drive a month’s worth of liquidity in a single shot. This means the more liquidity, the less time it takes to earn profits. Hence, it proves to be crucial when times are desperate. When the money requirement is huge, count on volatility.
Yet, it can be a double-edged sword. Burning your profits and impaling your bank balance. So, use it wisely as it can prove beneficial.
It is 24/7
The foreign exchange market is open 24/7 and from Monday to Friday. This feature provides ample time for traders to earn day in and day out. The market timings start in Australia and end in New York. Covering losses is a crucial money-making feature. Forex trading has it in plenty.
Liquidity is an Ocean
During tough times, in some markets, there is a restraint on the money supply. This causes the markets to halt. Causing a heartbreaking moment for most traders. This is not the case with foreign exchange trading.
Due to the involvement of banks, governments, and big corporations, the money supply is relentless. It maintains millions and billions of dollars each month. Sometimes, the figures can reach trillions. In contrast, other markets face circuits, which can delay selling especially in bear markets. This is certainly not the case with foreign exchange trading.
Hedging is the King
Hedging is the ability to place countertrades. While having buy positions, the sell positions mitigate the unseen risk. This is shorting. Shorting reduces risks. And risks can come in all shapes and sizes.
In today’s world, correlated currency is the epitome of hedging strategy. In this, traders place positively correlated currencies on trade like EUR/USD and GBP/USD. This means, that by shorting EUR/USD, the risk trade is alleviated by a GBP/USD long trade.
Variety of Options
Due to the involvement of almost every country, options of currencies are available at stake. Be it USD, EUR, INR, GBP, AUD, or JPY the list is long. Almost every currency is present. Traders can buy and sell at will.
Forex Trading at MarketTargets
The next step is to choose the best forex trading platform which offers top-notch services. You don’t have to look any further. With MarketTargets, you can access the best-in-class and updated technological setup in a dynamic environment.
Serving clients worldwide has given us the edge to achieve on-time updates with superior quality. With reliability, global support, powerful platforms, and global accessibility your trades will reap fruitful results. With MarketTargets, forex trading is straightforward.
If forex trading interests you, here is your chance. With MarketTargets, it is easy to start your forex trading journey in just 3 simple steps:
- Registering your account with MarketTargets.
- Filling your account with sufficient funds.
- Start your first trade.
Conclusion
Therefore, foreign exchange trading is a huge landscape that offers plenty of opportunities. Not only is it pivotal but true to the core beliefs of finance. Allowing people from every walks of life garners a new breed of money market. While liquidity is solid, its 24/7 availability makes it a class apart then any trading method.
With a lot of competition, it is crucial to find the best partner that coincides with your benefits. And this is what Market Targets has done and will do again. Forex trading with Markettargets.com is an easy and stress-free job.
