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Forex or Spot Trading |
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Forex or Spot Trading Defined
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Forex / Spot Is the same thing.
Prior to the era of floating exchange
rates, few envisioned the volatility potential of currency exchange rates and
its subsequent impact on international economy and trade. The volume in
foreign exchange has experienced exponential growth. From 1977, the daily
volume of U.S. $5 billion increased remarkably to U.S. $600 billion by 1987,
after just a decade, and reached the U.S. $1 trillion mark in September
1992. Today, this figure is a staggering U.S. $2.7 Trillion every single
day. What is behind this phenomenal growth? For one, the pace of
international trade and commerce increased dramatically in 1989 due to the fall
of Communism in Europe, coupled with economic and financial growth that picked
up in both Southeast Asia and South America.
The mechanism of exchanging one currency in terms of another has
become the backbone of all international capital transactions.
The money of one country must be converted to that of another
for settlement of a transaction often times through a bank via
letter of credit. Moreover, there are always blocks of
assets to be moved and protected from currency fluctuations.
This system has created the Foreign Exchange Market, the most
vibrant, dynamic, and most liquid financial market. Today,
the market offers an alternative for investment diversification
and has become a very important tool for asset risk management.
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Investing in Foreign Exchange provides a number of advantages.
24 hours a day execution allows investors to protect their
investment across international time zones.
With over $2.5 trillion traded daily
(compared with $20 - $30 billion a day in NYSE), investors are always able to
liquidate their position. Unlike futures or stock markets operations, there is
never a lack of taker (buyer or seller). There is always a domestic,
international or central bank ready to service your orders.
3. Attractive Pricing
One-price execution based on current
interbank rates regardless of transaction size.
Market orders are executed and confirmed
with a single phone call in seconds.
Foreign Exchange contracts opened can be
rolled-over daily for an indefinite period of time.
Foreign Exchange contracts can be
delivered upon payment of full value of contract and are purchased/sold on a
spot basis.
Investors involved in international trade can minimize their currency exposure risks by investing in Forex.
Profits are realized from both the
fluctuation of the currencies and interest rate differentials.
No single person or institution not even
Central Banks can control the Forex Market . The volume of foreign currency
traded is larger than the total reserves of all Central Banks of the world.
MTI's Online Live Track Record -
Click here
Please note -Some MTI students have made much more while participating in our
online live interactive trading sessions, "Earn
While You Learn" program.
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Featured Forex |
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