Foreign Exchange Market

Before writing about foreign exchange market, I have written three contents named visualize currency exchange rate, foreign currency accounting and voucher entries of profit and loss from Forex fluctuation in accounting education and FEMA 2000 and FTDR Act 1992 in business education. These contents will be helpful for learning foreign exchange. Foreign exchange market is that financial market in which currencies are purchased and sold. Suppose, you have to purchase goods in India, you will go to wholesale commodity market for purchasing cheap commodity and sells it in retail market. Like commodity market, currencies of all countries are also product in world market where some countries value are so high and other country’s value are so low. Almost all developed countries' currency value is higher than developing countries' currency value. In foreign exchange market, one country’s currency is exchanged to other country’s currency. Suppose, I buy USA country’s currency in foreign exchange market. There are many online websites which are working as foreign exchange market. For this, I have to pay Indian currency. Suppose, today is the rate of 1 $ is Rs. 45.50. It means if I purchase 1$ dollar, I have to pay Rs. 45.50. Suppose, tomorrow value of $ 1 is Rs. 46. Then, it means I will receive .50 paisa. Suppose, I purchase 100 dollars with money Rs. 4550 and then I will receive Rs. 50 profit. But it is not possible that always, you will gain. You can suffer loss in this market. From six month, I am watching that Indian currency is becoming strong and value of dollar is decreasing. It means that you will suffer loss, if you will buy USA dollar because trend showing that value of dollar is decreasing. I have given the example of Forex market of India. In your country, you can also deal in this market.

Low Risk in Forex market

I think that there is low risk in Forex market that share market, if you are ready for investment. It is the reason that some Indian investors are investing in this market. 2 days one of my friend, who is trading in foreign exchange market went to Muthoot finance and gave some gold and got Rs. 300000  and invested in foreign exchange market. It means that he is taking money from gold market and investing in foreign exchange market. He told me that he has to give just 1% per month interest on gold loan and he is earning more than 8% from foreign exchange market. I can believe on his wording because he is my best friend. But, I can not advice to do this because; foreign exchange market is affected with the large number of factors which affect its exchange rate. It is also main cause of finance crisis. So, take low risk but after thinking.

Currency is exchanged in Forex market after Calculating