subject: The Business Of Currency Trading [print this page] Currency trading is the less common term for foreign exchange or Forex. This kind of trading refers to the practice of converting one currency to another currency. Currency trading happens because all currencies have different but related values; the value of one currency is relative to the value of another currency. The concept of currency trading is made familiar to most people because of the foreign exchange rate, something most people know about. This rate is the rate at which one currency can be exchanged for another. Exchange rates of currency trading are never constant; they continually fluctuate. This is due to multiple economic factors, which include inflation, geopolitical events and industrial production.
Currency trading is an international enterprise. Multiple parties around the globe are involved in currency trading. In fact, the foreign exchange market is the biggest cash market in the world. Transactions worth $3.2 million are done around the clock, with weekends as the only exception. The currency trading market is quite distinct compared to other markets. Unlike the stock market, currency trading is not a regulated exchange. Currency trading is also not ruled by a central governing body. When it comes to currency trading, there are no clearing houses or arbitration committees to safeguard trades or adjudicate respectively. The brokers and traders must do their transactions based on credit agreements.
The practice of currency trading used to be exclusive to large investors. Only multinationals and conglomerates were the main movers of the currency trading market for years. It was not until recently that smaller investors got the chance to enter the market place. Now, small investors and trading individuals can also participate in currency trading. In fact, many people have become interested in currency trading. While currency trading does present a high risk, it also presents an opportunity for huge profit.
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by: AlexK
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