Why Forex ?
What is currency trading account
A forex account is one that holds deposits in one or more currencies for trading. These trades are based on the movement of the foreign exchange market. With this type of account, you can now unlock vast and potentially significant returns from global markets. These and other factors draw investors to forex trading.
What is Forex trading?
Before we discuss the various advantages of a FOREX trading account, let’s understand FOREX trading in detail.
FOREX, the word is a portmanteau, a blend of the words foreign currency and exchange, and self-explanatory. In FOREX, you trade in the currency market, which is the largest market in the world. The daily estimated trading volume is USD 6 trillion, spread over different hotspots around the world and remains active for 24 hours.
FOREX trading is unlike the stock or commodity market. In FOREX, traders trade currency pairs in the direction of the market. Unlike buying stocks, when you trade in currencies, you are simultaneously buying one currency and selling the other. And, you don’t need a DEMAT account for currency trading, as there is no delivery of currency involved. Most trades in the currency market are cash-settled. For online FOREX trading, you only need a currency trading account.
If you are wondering, forex trading can add diversity to your portfolio and let your investment exercise better. The market remains open for 24*7 involves a variety of players from government, banks, institutional investors, travelers, corporations, and amateur traders.
However, the forex market is decentralized. The market operates in different locations like London, Singapore, Tokyo, or New York. To participate in the market abroad, you would need a broker with an international reach.