Due to increase in the foreign investment and the rapidly growing international trade the value of currency keeps changing. You can benefit from the changes at the foreign exchange. Currencies need to be exchanged in order to do foreign trade and business. The need for to exchange currencies makes it the largest market in the world.
You can trade in currencies at the foreign currency exchange. It is the decentralized global or over-the-counter market for the trading of currencies. It is also called the FX, forex or the currency market. You can buy, sell or exchange currencies at the current or determined price. The main participants at the exchange are international banks and multinational corporations. Due to the internet service the currency trading is available to the individuals online. Trading in currencies online is called online forex trading.
Many websites offer online news, charts, updates and this information is very useful to trade online. To trade online you need an online account.
Online electronic trading platform is also known as online trading platform. It is a computer software program used for financial products over the internet. It allows you to trade in currencies and other financial products online. There are many online brokers who offer online trading. They differ in the charges and services offered. You can select the best forex trading platform as per your requirement.
There are full service brokers and discount brokers. For the full service the charges are high and the service provided is good. Discount brokers have low charges but do not offer any investment advice.
Benefits of trading in currency
There are many benefits of trading in currency. They are :
- The market is very competitive and therefore the brokerage fee is low
- The transaction cost is low
- It is a very advantageous by-product of high liquidity
- In the futures market the exchange determines lot or contract size. This allows the traders to trade in multiple lots.
- The market has high liquidity. This allows the traders to enter and exit the market in any market condition.
Currency trading in India
In India the currencies are traded against the indian rupees. The exchange does not fix the absolute value of a currency. The currencies are traded in pairs. Each pair is called the trading product. In currency pair the first currency is called the base currency and it is quoted relative to the second currency which is called the counter currency.
In forex trading in India the major currencies traded against the Indian rupee are USDINR, EURINR, GBPINR and JPYINR.