Hola!!!
Wow!!!, Rocky, what a party that was. The chick on the dance floor, selection of alcohol collection, the marques of cars. I have never been to a private night party like this in life before, amuses Shelby. Rocky smiles and asks, what were the party for and who took you on that level. Shelby responds by saying, there is a childhood friend of mine, who returned to hometown after a long time and arranged a party as his company was opening a new branch in our city. I feel bad for not being in-touch with him for all these years. Otherwise, I would have asked him to instruct me on how he made those millions of dollars using forex trading. Rocky laughs and says it’s not that comfortable to earn millions and it would involve time and experience, but if you like to read and understand, how forex trading works, I would be willing to explain you. Shelby gets excited by getting out that rocky is aware of how the forex currencies work and process to perform trading, he commences with his stream of questions to rocky as follows:
Forex
Rocky: What is the forex market?
Shelby: The market which will make me a millionaire soon. Ha-ha!!
The foreign exchange (otherwise called as FX or forex) market is a worldwide commercial center for trading national currencies against each other. You exchange one currency against another currency, on the desire that their qualities will move so the money you're holding gains in value comparative with the one you traded away.
Rocky: How prominent is the forex market compared to other market?
Shelby: As prominent as to get me millions
The foreign exchange market (Forex, FX, or currency market) is a worldwide decentralized or over the counter (OTC) showcase for the exchanging of currencies. This market decides foreign exchange rates for each currency. It incorporates all parts of purchasing, selling and trading monetary standards at current or decided prices. As far as exchanging volume, it is by far the biggest market in the world, trailed by the credit market.
Rocky: How are currencies traded and what control their values?
Shelby: Maybe It’s like I give one briefcase of currency notes in exchange to their two briefcases full of currency and vice-versa with others
Financial centers around the world function as anchors of exchanging between a wide scope of different kinds of buyers and sellers around the clock, apart from weekends. Since currencies are always traded in pairs, the foreign exchange market does not set a currency's absolute value yet rather decides its relative incentive by setting the market cost of one money whenever paid for with another. Ex: US$1 is worth X INR, or CAD, or JPY, and so forth.
Rocky: Who are the well-known sectors of market participation?
Shelby: I hardly understood what you are asking for. I'd pass on this one
The foreign exchange market is categorized dependent on the degrees of access unlike other markets, where everyone is same as an association. The key players in the forex market are:
• Commercial organizations
• Central banks
• Foreign trade fixing
• Investment management firms
• Retail foreign exchange traders
• Non-bank foreign trade organizations
• Money transfer/remittance companies and bureau of change
Rocky: What are top five currencies traded by value?
Shelby: I’m sure, USD, Japanese Yen, will be there. Aren’t they?
• United States dollar, USD (US$)
• Euro, EUR (€)
• Japanese Yen, JPY (¥)
• Pound Sterling, GBP (£)
• Australian dollar, AUD (A$)
Rocky: What are the common factors that influence the value of currency?
Shelby: Maybe imports and exports or traders
• Economic factors
• Political factors
• Market psychology
Rocky: What are the benefits and risks of Forex trading?
Shelby: I already know the benefits; you say the risks. Haha!!!
It's autonomous of the single country economy, even in tough situations in a single economy, there might be blast times in different nations, and forex exchanging lets you bring in cash on those distinctions.
Tremendous benefits are conceivable, even with an exceptionally little investment.
No predetermined working hours; Forex exchanging causes you exploit dynamic markets in different nations when it's early morning or late night in your nation.
High hazard; you can lose large if cash patterns don't go as you anticipated.
Minimal guideline; Forex is a universal market with just some policing by certain nations. On the off chance that you get ripped off, there' a decent possibility you'll be all alone.
Time need: exchanging forex is genuinely mind boggling, so you'll need to dedicate an ideal opportunity of time to figuring out how to do it.
Tidbit Wrap
You exchange one currency against another currency, on the desire that their values will move with the goal that the cash you're holding gains in esteem comparative with the one you exchanged away.
Opportunities are huge profits, little investment, no-foreordained working hours
Obstacles are high risk, minimal guideline, study required
Who should invest here:
If you are somebody who has money you don’t mind taking a chance on a volatile market and make money, by willing to keep updated with the news around the globe and don’t want to rely on single economy. Forex trading might not be considered an appropriate investment channel for retirement savings or passive income seekers without actively engaging your time and efforts on a daily basis.
As Rocky finishes, Shelby picks up by stating, “Oh boy, I already started seeing dreams about my society and the success party in the Las Vegas. Champagne fountains with models serving and dancing with the guest from all around the world.” Rocky laughs and interrupts Shelby to say “Silly, stop visiting the stupid dreams about money and start learning on how to earn money first, go get the books, I mentioned you to read.”
Forex Performance:
Let’s discuss a sample of Forex currencies performance from Mr.Vinstors# portfolio:
American Dollar (USD $) to Indian Rupee (INR ₹)
Then Year2005 – 1 USD = 43 INR **
Now Year2020 – 1 USD = 75 INR**
UK pound (GBP £) to Argentine Peso (ARS Ars$)
Then Year2005 – 1 GBP = 5.20 ARS **
Now Year2020 – 1 GBP = 91 ARS**
American Dollar (USD $) to Mexican Peso (MXN Mex$)
Then Year2005 – 1 USD = 10 MXN **
Now Year2020 – 1 USD = 23MXN **
American Dollar (USD $) to Brazilian Real (BRL R$)
Then Year2006 – 1 USD = 2.10 BRL **
Now Year2020 – 1 USD = 5.20 BRL **
American Dollar (USD $) to Russian Ruble (RUB py6*)
Then Year2005 – 1 USD = 27 RUB **
Now Year2020 – 1 USD = 72 RUB **
#Vinstor – The Value Street Value Investor
*These are subjected to changes.
**These are varying estimated values obtained from the historical data on the corresponding companies used as examples for conceptual understanding and do not represent any financial data or investment advice.
Disclaimer : All the conversations are solely for the understanding of the concepts and doesnot represent any live examples.
