Simultaneous buying of one currency and selling of another is the
basic concept behind the forex market. Foreign currency market is the
largest financial market of the world with a potential of $1.9 trillion
daily. Without any central market and central currency forex trading
market is said to be the most liquid market all over the world. It
operates through an electronic network of banks, corporations and
individuals trading one currency for another, spanning from one zone to
another across the major financial centers.
Open Your Foreign Currency Account:
Management of a foreign currency account is similar not as like as
maintaining a current account. There are several banks offering foreign
currency accounts. The procedure, eligibility criteria and the
processing charges differ from bank to bank. There are simple steps
towards opening a foreign currency account - Gather all the information
about foreign currency account, complete application forms have your
application processed and start banking
Types of Foreign Currency Accounts:
There are primarily two types of foreign currency accounts, Customer
Foreign Currency (CFC) Accounts and Foreign Currency Accounts (FCA) for
individuals. Both of them eliminate the necessity of conversion upon
receiving money from overseas and can be used to meet short-term
requirement for cash. The interest is calculated on a daily basis on
the balance amount.
Advantages of the Forex Market over other types of investments
The Forex or Foreign Currency Market is relatively new as compared to
the other investment plans. Forex trading is said to be volatile and
most liquid market. It has many advantages over other types of
investments. Some advantages of the currency trading over other forms
investment plans are as follows:
• The Forex market is accessible 24X7 any where. There is no fear of
closing the market at the end of the day. If you have access to a
computer trading is possible anytime and anywhere.
• Almost every investment requires a substantial amount of capital
before one can take advantage of an investment opportunity but for
currency trading only small amount of capital is needed. For trading
with a mini account only $300 USD is required.
• The Forex market is very liquid as compared to other investment
markets. Trading with the currencies you have full control of your
capital.
• Often investments require holding capital for long periods of time.
So if you need to use the capital there will be a huge loss.
About the author:
Forex is the largest market place of Currency trading. While currency trading in Forex
Market or dwelling over currency market, one should mull over the
present scenario and future prospects of the country, currency of which
he is trading.
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