A currency that is current in a particular country for buying and selling of products and services cannot be used to buy or sell at a foreign country because in the foreign centre the currency is different. Hence the need for Foreign Exchange. (Forex). For buying the necessities of life, Now in India rupee is the currency. With this Rupee on hand you cannot pay for imports from USA where $ is the currency and the US exporter will not accept Indian Rupee. Hence you have to make payment only in $ terms acceptable to the US seller. Like a commodity, an Indian importer purchases $ currency and pay for imports. This is the way in which an Indian Rupee is purchased by an US importer and pay for the Indian importer.
How the payments are made?
The Central Bank of the country are the authority to sell and buy foreign currency known as Foreign Exchange (FOREX). These are done through the authorized Foreign Exchange dealer Bank both Government and private banks in all countries of the world.
How commodity is traded online
Its our choice in case of Share business, we buy the capital stock of companies, hold it for some time and sell it when the prices go up.Depending upon the market trend and earn a profit, we buy Foreign Exchange in Forex trading of our choice.Wrong decisions take at the time of buying or selling of shares results in loss. In Forex trading, same is applicable.
Who can trade?
The choice of business was once considered of big business houses.Now with the advent of internet, trading in foreign currency can be done with a minimum investment say $100. By paying your country’s currency to the Central Bank of the country through the authorized Forex dealer bank, you can create your Trading account online by paying $100.In consultation with expert advisers on finance engaged in the field you can sell and buy Forex or on your own you can trade. You have the option to buy or sell depending upon the market trend and decide the buying or selling, every day the Forex prices i.e. selling and buying rate are quoted in the internet, newspapers etc. Individuals do online trading as a retail business like share investments.
Good understanding about the procedures, analytical ability to assess the finance and international trade and commerce is easy to transact. It requires also some experience.
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