Forex Trading

I might just say that forex is the short form of foreign exchange. Yes, it is correct but is it all that we need to know?

Actually forex is the exchange of currencies. It can be said that in the foreign exchange market, people swap the currencies or buy and sell the currencies.

Suppose I have 100 rupees. I know that US dollars will get stronger when compared to Indian rupees in a few coming days. I sell my 100 rupees in exchange to say $2. In a weeks time the currency rupees falls to a level of 52 compared to a dollar. Then I sell that $2. I will get 104 rupees (52 multiplied by 2). So I am now at a profit of 4 rupees.

I am talking in very small figures. But generally people do forex trading in huge amounts. Now you can think of a question that how to find whether a currency is going down or going up?

The currency of any country depends upon its economy. So if the economy is changing the rates of the currency compared to other countries will change automatically.

Suppose you know that United States will again be getting into another recession, then the economy will fall definitely so will the currency of United States.

But the amazing fact is that the forex trading is in a way independent of the economy. Whatever is happening to the economy, you can still have a chance of getting the profit in trading provided you have some skills in determining the market trends.

Forex trading market is the highest market in terms of liquidity. So each and everyone has a chance there to get some profits.