Many questions arise in mind when we talk about forex trading (FX). Many of us want to invest in such trading but have a lack of knowledge. This article tries to answer frequently asked questions about forex trading:
What’s Forex Trading?
It is the conversion of currencies into one another. Forex trading is among the active markets of trade having an average trade volume of above 5 trillion dollars. It is the platform where buyers and sellers trade currencies at an agreed price. This is the way individuals, companies, and banks convert one currency into another according to demand. People traveling abroad do this type of trade to get the currency of that country. So the price of the currency depends upon the demand for that currency at a specific time. The forex market is highly volatile as it depends on the daily trade of currencies. This volatility makes it attractive, risky, and at the same time profitable.
Also read: What is Forex Trading? Basics & Strategies
Is Forex Trading Real?
FX trading is real and can give huge profits, but it is a full-time job. To get profit from these tradings it is recommended to give full attention and learn techniques. Similar to other businesses overnight success in forex trading is also nearly impossible.
Is FX Legal?
Yes, forex trading is legal in all countries including Pakistan. Many countries allow only real currencies and forbid digital currencies. For trading currencies, you must have income tax filling.
Is Forex Trading Profitable?
The profit and loss are unlimited and depends upon investments and strategies. Taking more risks can provide you with many profits and have equal chances of losses too. So it is in your hand to make this market profitable for you. There are many success stories in forex trades.
How does Forex Market work?
Forex trade happens directly between two parties, in and over the counter market. The trade does not occur on an exchange. It is run by the network of banks present around four major trading centers i.e. London, New York, Sydney, and Tokyo.
Different ways to trade are by trading face to face physically, which takes place at the same place and time of the agreement. Another way of trading is to sign a forward agreement with future dates. Lastly, the trade can be done by signing a contract to buy an amount, at a certain place in the future. Unlike the forward way of trading, futures trading is legally bound.
In forex trading, you are buying another currency by selling the one you have. Previously a lot of market transactions are done by the broker, but with the rise of online trading, everyone can do it him/her self.
Can Forex Trading Make you Money?
As this market demands investment so investments lead to profits. People trade to earn money similar to every other business.
What is Forex Market Trading Hours?
The market is open for 24 hours a day in different parts of the world. During the week it opens for five and a half-day. The 24 hour availability is due to its presence in different time zones.
What is the Best Forex Trading Platform for Beginners?
If you are a beginner and looking for the best brokers you can choose any of them: