| Forex trading has been a common practice used by | | | | location. NASDAQ which is a premier national stock |
| traders on Wall Street and around the world to | | | | exchange in the US operates without a trading floor |
| supplement their income or ear a full-time income. | | | | or a physical location. All trades on the NASDAQ are |
| With increasing global trade there is an increased | | | | carried out "virtually", electronically using computer |
| desire to learn Forex trading not just on Wall Street | | | | networks. Much like the NASDAQ, foreign exchange |
| but on streets from Dallal street in Mumbai,India to | | | | transactions are not executed across trading floors. |
| Rua XV de Novembro, in Sao Paolo, Brazil. Foreign | | | | Forex trading is carried out through computer |
| trade generates capital flow due to trade in goods, | | | | networks and over the phone across countries by |
| services, commodities and investments. | | | | Forex traders. |
| Much of the demand in Forex is also from speculative | | | | The major players in the Forex market are typically |
| trading. Various factors such as weather, national and | | | | global conglomerates that need foreign currency for |
| international and economic policies affect the trade | | | | their international trade and investment deals. |
| imbalances. Speculators monitoring these policy | | | | Companies like Temasek Holdings, Dubai Investment |
| changes and weather conditions predict the price of | | | | Group, KOHLBERG KRAVIS ROBERTS & CO |
| foreign currency in the future and engage in | | | | etc., international banks and brokers are some |
| speculative trading. It has been estimated that nearly | | | | examples of the major participants in Forex markets. |
| $3 trillion or more is exchanged in all currencies on | | | | Conclusion |
| any given trading day the per transaction amount can | | | | Finally, in conclusion one must realize that the foreign |
| be as high as $10 million. Larger deals are also | | | | exchange market is not just influenced by actual |
| frequently done. The path to learning and leveraging | | | | economic factors but the foreign exchange markets |
| Forex trading techniques has a well defined beginning | | | | unpredictability can in turn affect the same economic |
| but is long and continuous process. | | | | variables. |
| Fundamentals | | | | Even minor fluctuations in the currency value of a |
| Forex trading usually can be done as a spot or | | | | country can have deep effects on the nation's |
| forward delivery. On an average actual currencies are | | | | commerce and general financial health. A drop in the |
| exchanged in two business days for spot trading. In | | | | currency value puts a considerable stress on a |
| contrast, forward transactions involve a delivery date | | | | nation's domestic inflation as imports cost more which |
| in the future, sometimes from a month to a year in | | | | in turn increases the manufacturing cost of goods |
| the future or more. Since forward transactions | | | | produced locally. Weaker exchange rates mean |
| involve dealing with contracts in the future typically | | | | purchasing foreign currency is more expensive. |
| banks provide protection on the value of the | | | | A stronger currency means imports are cheaper and |
| projected flows of foreign currency by preventing | | | | so the domestic inflation rate is lower. Stronger |
| exchange rate instability. | | | | currency rates mean purchasing foreign currency in |
| One of the important distinguishing features between | | | | exchange for local currency is cheap. Becoming |
| regular stock or commodity trading and Forex trading | | | | knowledgeable of a currencies fundamentals can help |
| is that monetary markets do not have a physical | | | | both fundamental and technical traders to profit. |