FOREX, make fortune by dealing in foreign currencies
Many people think that dealing in FOREX is similar to dealing in the stock exchange. They look similar and referred together, but there are several fundamental differences between the two. Before making an attempt of making a fortune in the FOREX market, it is important to know about it in detail. While trading in the stock market means you trade for the shares of one or more companies, here you trade for the currency of one or more countries. The earning principal in both cases is same; buy at low price and sell at high. Betting on rising prices (long trading) or betting on falling prices (short trading) is relatively easy in FOREX trading.
It’s an exciting market
FOREX is undoubtedly an interesting and trader-friendly market. Some people trade in their respective country, some trade in other countries, and some are engaged in speculations. A few traders hedge one currency against other currency so that the losses remain low. If we think about the market in a global perspective, then there are multinational operators, speculators, hedge funds and exporters-importers. It is a huge market with a huge turnover. With the 24×7 accessibility, it is a 100% liquid market. Entry and exit points are low, but it is still easy to maintain large positions. It is open to all and dealing in FOREX market becomes as simple as ABC with the introduction of online trading.
What is the difference between return and yield in FOREX trading?
The two terms are used very frequently in FOREX market. Since FOREX is a spot market where buying and selling ratio of two currencies play a great role. There is a fixed interest rate defined for a particular currency. When a currency is bought or sold, the interest rate is also earned or paid. Thus, the return refers to the gross difference whereas yield refers to the actual profit after deducting the interest rates. Traders provide hot tips for currencies that earn the highest interest rates.
What is carry trade?
It is a trading strategy of earning differential rates and appreciating the value in future. Typically when the difference between two currencies is huge, traders have a chance of earning positive yield and capital gain. The traders have to trade long when the interest rates expand. They have to trade short when the interest rates contract.
An expert FOREX agency gives tips about the best ways of earning profits. It maximizes profits and minimizes risks.