Forex trading has been a common practice used by traders on Wall Street and around the world to supplement their income or ear a full-time income. With increasing global trade there is an increased desire to learn forex trading not just on Wall Street but on streets from Dallal Street in Mumbai, India to Rua XV de Novembro, in Sao Paolo, Brazil. Foreign trade generates capital flow due to trade in goods, services, commodities and investments.
Much of the demand in Forex is also from speculative trading. Various factors such as weather, national and international and economic policies affect the trade imbalances. Speculators monitoring these policy changes and weather conditions predict the price of foreign currency in the future and engage in speculative trading. It has been estimated that nearly $3 trillion or more is exchanged in all currencies on any given day trading the per transaction amount can be as high as $10 million. Larger deals are also frequently done. The path to learning and leveraging Forex trading techniques has a well defined beginning but is long and continuous process.
Forex trading usually can be done as a spot or forward delivery. On an average actual currencies are exchanged in two business days for spot trading. In contrast, forward transactions involve a delivery date in the future, sometimes from a month to a year in the future or more. Since forward transactions involve dealing with contracts in the future typically banks provide protection on the value of the projected flows of foreign currency by preventing exchange rate instability.
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