The foreign exchange (FX) market involves exchanging one country's currency for the currency of another country (or region). It is clearly all about trading money.
Money changers and foreign currency trading is not of recent origin. Bible mentions about the foreign currency trades that were taking place inside Jewish Temple, which was disliked by Jesus, because it was place of worship. If the foreign currency traders of those days took their business to the utmost holy places of Jews, you can guess what kind of attraction the foreign currency trading had in those days.
Over the several centuries, after Christ, the foreign currency trade continues unabated. In modern times with latest technology, you can trade currencies sitting at home and make money !!
Foreign currency market is the largest market in the world. It is several times bigger than the stock markets or commodity markets of the world. Why is the foreign exchange market so large? Why is its magnitude or trading volume is several times greater than the flows required by the entire amount of global international trade? Why does the foreign currency market is the only market that is open 24 hours during any working day. Indeed, foreign exchange has an unique position beyond being the largest financial market in the world.
Foreign currency represents the money of a different country. Money, in whatever form, fufills three functions:
1. A medium of exchange: If you want to exchange your product, you can exchange for money.
2. A unit of account : Do you want to understand the price of a product? You can do it in terms of money.
3. A store of value : You can keep (store) the money in your cupboard or in a bank and use it when you want.
It is interesting to note that, some investment advisors sometimes recommend holding currency in their client's portfolios. This involves actually dedicating a portion of one's wealth to a "basket" of currencies as part of one's asset allocation decision-making process. This might involve a client holding some US Dollars, Indian Rupee, Chinese Renibi, Euros, Pounds Sterling, Swiss Francs, Canadian Dollars, Australian Dollars, Swedish Krona, Brazilian Real, South African Rand or Japanese Yen in his/her portfolio.
However, the foreign currency market is dominated by a few currencies. These currencies are known as Major currencies because they account for the vast majority of foreign exchange transactions . These currencies are
• The United States Dollar
• The Euro
• The Japanese Yen
• The Great Britain Pound
• The Swiss Franc
The foreign currency traders must understand the dynamics of these currencies to make money through foreign currency trading.
Money changers and foreign currency trading is not of recent origin. Bible mentions about the foreign currency trades that were taking place inside Jewish Temple, which was disliked by Jesus, because it was place of worship. If the foreign currency traders of those days took their business to the utmost holy places of Jews, you can guess what kind of attraction the foreign currency trading had in those days.
Over the several centuries, after Christ, the foreign currency trade continues unabated. In modern times with latest technology, you can trade currencies sitting at home and make money !!
Foreign currency market is the largest market in the world. It is several times bigger than the stock markets or commodity markets of the world. Why is the foreign exchange market so large? Why is its magnitude or trading volume is several times greater than the flows required by the entire amount of global international trade? Why does the foreign currency market is the only market that is open 24 hours during any working day. Indeed, foreign exchange has an unique position beyond being the largest financial market in the world.
Foreign currency represents the money of a different country. Money, in whatever form, fufills three functions:
1. A medium of exchange: If you want to exchange your product, you can exchange for money.
2. A unit of account : Do you want to understand the price of a product? You can do it in terms of money.
3. A store of value : You can keep (store) the money in your cupboard or in a bank and use it when you want.
It is interesting to note that, some investment advisors sometimes recommend holding currency in their client's portfolios. This involves actually dedicating a portion of one's wealth to a "basket" of currencies as part of one's asset allocation decision-making process. This might involve a client holding some US Dollars, Indian Rupee, Chinese Renibi, Euros, Pounds Sterling, Swiss Francs, Canadian Dollars, Australian Dollars, Swedish Krona, Brazilian Real, South African Rand or Japanese Yen in his/her portfolio.
However, the foreign currency market is dominated by a few currencies. These currencies are known as Major currencies because they account for the vast majority of foreign exchange transactions . These currencies are
• The United States Dollar
• The Euro
• The Japanese Yen
• The Great Britain Pound
• The Swiss Franc
The foreign currency traders must understand the dynamics of these currencies to make money through foreign currency trading.
No comments:
Post a Comment