How To Make Profit Through Currency Market

Posted by ways2capital on June 13th, 2018

As the different economy has open there doors for the investment from Foreign Investment Institution and Foreign Direct Investment. That means each economy wants to sustain in global market in concern of their performance and growth for which there are some perimeters, these are dollar reserve ratio, import and export, monitory policy, interest rate, inflation rate all these factor affect the growth of that economy and the value of currency as compare to the other currencies.

As we know that, for any kind of international trade or transaction mode of payment is an international currency i.e, US dollar. Due to the globalization and liberalization currency exchange play a vital role to exchange one currency into another in global market.

Currency Trading: Currency trading facilitates foreign trade by exchanging one currency into another. Like equity or commodity trading held on an organized exchange. Forex is also an Exchange or market place where an individual can trade in different currencies or can exchange them.

Forex (foreign exchange market) is a global decentralized market for the trading in different currencies which open for 24 hours. In forex different currency pairs are available for trading.

In a pair first currency is a base currency and second currency is counter currency. When an individual buy or sell this currency pair, that individual performing that action on base currency. In forex there are around 39 currency pairs are available. Like EUR/USD, USD/JPY, GBP/USD here in the above pairs EUR/USD base currency is EURO and the counter currency USD that represent the value of US dollar in Comparison of 1 Euro.

Know we have understanding that there are so many factors that we have discuss above that impact the overall performance and growth and individual economy globally apart from that the other factor like some data's about industrial production, consumer price index, wholesale price index and other that affect the valuation of the currency as compare to other. In international market some index are also available like US Dollar Index that shows the performance of US Dollar in comparison of other currency. Like may you have heard about the data's related to US Economy like 'Unemployment Claim' or 'jobless claim' that US government provide to US jobless people. If Jobless claim is positive or negative then it would impact on US dollar. May be the value of dollars can appreciate or depreciate in comparison of other currency.

As the performance or growth of an economy affect its valuation of currency also. In international market every economy linked with each other in concern of international trade and import and export. Import and export also play a vital role on currency appreciation and depreciation. In international market US Dollar is an international currency, for the import of any kind of commodities mode of payment is in US dollar. Thus it is important for each economy to maintain a strong dollar reserve.

For any individual economy if import is less and export is high means economy is on growth because that generates a foreign income through which dollar reserve can increase. While is import is high and export is less that means value of currency of that individual economy will be less as compared to the other currency.

Like mcx tips in cash, commodity, future and option an individual can also receive a recommendation in currency market. According to his individual risk appetite because, in currency derivative an individual can trade with the minimum investment as compare to the equity, commodity and its derivative.

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