While we are accustomed to share markets news and many have an idea of making trades—not many can say the same for currencies. Yes, there is a market where you buy and sell currencies the same way you buy and sell shares of a company.
There is limited knowledge regarding currency trading among existing and potential investors. Call it lack of awareness or lack of adequate resources—there is a big opportunity to make wealth but being lost. Here are a few interesting snippets to ease your way into the currency markets.
It’s always open
Unlike stock markers which have an opening and closing time; the currency market (forex market) is always open making currency trading even more lucrative. You can make a profit any hour of day or night.
Diversity
When you include currencies in your trading portfolio, it is a wise step. Compared to shares, currencies are liquid most of the time and are one of the least volatile financial markets around and currency manipulation is hard, making it a transparent and safe place to trade.
Focused Trades
When one trades in the share markets, you have to concentrate on the many shares in which you trade. When it comes to currency markets, trading takes places in the major currencies which are single in number and leave no room for confusion. You can make sharper trades and earn greater profits.
Currency Pairs
India’s central bank—the Reserve Bank of India (RBI) does not permit Indian individuals to trade in foreign currencies where the Rupee does not form part of the currency pair. Only four instruments are permitted: Dollar/Rupee, Euro/Rupee, Yen/Rupee, and Pound/Rupee.
The Exchanges
While currency trading and prices work according to demand and supply, the RBI and SEBI regulate the currency markets in India. One can trade forex at the Multi Commodity Exchange (MCX- SX) or the National Stock Exchange (NSE).
There is a wealth of opportunity when it comes to trading in currencies. Educate yourself before you wade in so that you can make profits and not losses.