Lennox Kimtai

 All You Need Know About Forex What is Forex? Forex is short for Foreign exchange. It is basically the conversion of a currency of one country to that of another. www.roiinvesting.com/forex-trading-market/ Supply and demand in a free economy is what determines the value of a certain country’s currency. A currency can be stabilized by making the exchange rate fixed to that of another country, mostly the stronger currencies like the US Dollar. This can also be done by the government of that country. Usually the value of the currency is set by the forex market. This is done by comparing the supply and demand of currencies. Factors like tourism and investment largely determine the value of a certain currency. Tourists from foreign countries have to convert their currencies to those of the countries they have visited for them to make payments or trade in anything. This is the same for investments. A foreign investor has to convert his/her currency to the local currency. When two companies from different companies what to engage in any business there must be conversion of currencies. The fact that currencies always have to be converted makes foreign exchange a very large market globally. www.harvesthcm.com/how-compensation-management-software-makes-currency-conversion-easy/ Fifty years ago the main sources of supply and demand for foreign exchange were exports and imports. Today the most important sources are the financial transactions done all over the world, most of them by people who are involved in foreign exchange trading. The rise in the exchange rate of a certain currency is caused by people in the market trading using that currency. The Economist claims that foreign exchange is the largest market, and the turnover (daily) is about $1.9trillion. The Bank for International Settlements’ report (2012) showed that the foreign exchange market traded in around $4.9trillion every day. Forex trading Foreign exchange trading means the sale of one currency while buying another one with the aim of making a profit. Factors like supply and demand and geo-politics determine whether value of currencies either go up (appreciate) or go down (depreciate). Advantages of forex trading It can be said that the main advantage of forex trading is that there is no specific place where you are supposed to trade. Businesses and foreign trade need to be conducted on a daily basis so foreign exchange is necessary. A tourist needs to change the currencies to be that of the local country and one has to change the currency is buying goods and services from another country. This kind of trade is usually conducted electronically wit traders linked via computer networks. The fact that the market is active 24/7 makes it an attractive business to invest in. When the day ends in one financial center it is dawn in another one. The market is active 5 ½ days each week, with the values of currencies constantly changing. One of the global providers of forex trading (online) is CMC markets. https://www.colourbox.com/image/currency-signs-on-white-surface-image-3540352 Liquidity is also one factor that endears many to forex trade markets. The need for currency exchange globally has made it the most liquid market in the financial world. It is far much more liquid than the stock market. You assess the currency’s value and when you find that its value will go up you buy it. When you think it will depreciate you sell it. The benefit of this is that due to the large markets there’ll always be buyers and sellers. Forex trading gives you the exposure if you ever dream of investing in another country. It has made trading with other currencies very easy so when it comes to investing you will easily do it with the knowledge you got from trading in currencies. Trading in currencies gives you the advantage of diversifying. When you think a currency that you have will depreciate you can sell it and buy another that you think will rise. The benefit of this is that when one currency depreciates another appreciates and vice versa. Another great advantage of trading in currencies is that all traders have the same opportunities. Currency prices are shown to all traders, their value depending on the factors like supply and demand. This allows the traders to research on these currencies, looking at the factors which affect their value and decide if to buy and sale.