Entering the world of money markets can be a challenging task. The involvement of money in some facets of life is a chilling experience. As forex is a pivotal factor in money markets, it is crucial to understand it. Here not only profit matters, but saving, it is also important. So, let’s deep dive into forex trading.

What is Forex Trading?

It is crucial to understand what forex trading is. Forex trading, otherwise known as currency trading in simple terms, is the buying and selling of currencies. Trading of currencies happens all over the world.

USD (U.S. Dollar) can be traded along with GBP (Great British Pound), INR (Indian Rupee), and Euro (The Euro) among others. But there are certain prerequisites to buying and selling of forex.

  • Involvement of Buyers and Sellers:

No market is complete without the presence of buyers and sellers. In order to complete a trade, there should be willingness of a buyer to buy a currency. Complementing this, a seller must need to sell the currency. Hence, the completion of a forex trade.

  • Price:

A trade is not complete without price. It is the most important element here. If buyers and sellers come along for a trade, a price needs to be quoted.

For example: if A wants to buy USD for $80, a seller must be willing to sell the currency at $80. But the seller must also have the currency. If do meet, then the trade is a success.

  • Demand and Supply:

Demand and supply here means the availability of currency at the quoted price and sellers selling the currency. Placing orders for a currency when it is not available for sale, will leave the order hanging. And supply resolves the issue of enough currencies available in the market.

Types of Forex Traders

To get a holistic view one must understand the type of players involved. As every aspect of life involves people, forex trading is also the same. The apple doesn’t fall from the tree. These types of traders are created out of their ability and ways in a given situation.

The general public falls into 4 types of forex traders:

Bluffer (also known as Speculator):

A speculator is a person with an innate ability to make predictions. They speculate or predict the happening of a certain event and accordingly place their trades. These factors can be currency-specific or economy-based.

For example: the rise in demand for INR, can increase its price, hence making it more expensive than before.

Hedger:

Hedgers are a crucial component of the forex market. Their basic foundation is to save their money. How do they do it? To mitigate risk, hedgers buy and sell different currencies at the same time and vice-versa.

Day Trader:

Day traders buy and sell currencies on the same day. It is known as squaring off the position. Their understanding of the market and risk is slightly different. They do this because it is risky for them to keep their trades overnight.

Swing Trader:

On the contrary, swing traders keep their forex trades for more than 1 day. Their belief is, the greater the risk, the higher the reward.

Forex Trading in India

Forex trading in India is a prevailing concept. Obviously, with the risks involved with the forex market, RBI (Reserve Bank of India) and SEBI (Securities and Exchange Board of India) have an eagle’s view. Due to their utmost philosophy of investor protection, the forex market is always under surveillance. In India, it is legal to trade in forex. The RBI restricts highly leveraged forex transactions through a margin account.

Profitability Regarding Forex Trade

Every other person’s motive to invest in forex is to earn profit, nothing else. So, the burning question is can one earn profit through forex trades? Yes, you can earn profit through forex trades.

Profit earning potential should be realistic. So, the expectations should be kept in check. The potential to earn higher profits is in the hands of a few players. Even experts can’t guarantee profits. But to earn a decent profit, could be the way to go in the forex market. So, planning and learning could be the greatest guide.

Forex Trading at MarketTargets

Market Targets being a sophisticated platform keep in mind the realistic approach to earn profits. With their branches available in stocks, commodities, cryptocurrencies and forex a professional and reliable view is on point. Carrying the added advantage of feeds about forex, you get the live experience of how the forex markets work.

With the dedication to deliver the best results through technological advancement with our platform, we are able to deliver seamless and updated information.  

Conclusion

Being in the forex market is tough. It is not easy, but also not difficult to earn profits through forex trades. Keeping in mind the expectations, the discipline to carry out the trade, and the odds you are up against is paramount to know. Through rigorous practice, one can reach the helm of forex trading.