All About Forex Trading For Beginners | Edelweiss Wealth Management

In today's video, Edelweiss Research Team shall be covering the basics of forex trading.

What is forex trading?
In simple terms, forex trading is the buying and selling of currencies. The exchange rate of a currency changes all the time and forex traders try to capitalize on these fluctuations. They buy currency at a lower rate and sell it at a higher exchange rate.

How can you benefit from the exchange rate?
Let us suppose the rupee-dollar exchange rate at that time is 70 rupees. So, you will have to pay 7000 rupees to get 100 US dollars. But you decide to wait for some time before buying dollars. In a week's time, the exchange rate declines to 69, so now you will have to pay 6900 rupees to buy 100 US dollars. In a similar manner, forex traders capitalize on currency fluctuations on a much larger scale, magnifying the profits but also considerably increasing the risk. Check US Dollar to INR rates here - https://www.edelweiss.in/quotes/curre...

What is the forex market?
A forex market is a place where participants can buy sell exchange and speculate on the currency. The currency and foreign exchange market, it's considered to be the largest financial market. It's daily turnover surpassing that of the futures and equity markets combined.

Benefits of forex trading:
1. High liquidity
2. 24 Hours Market
3. No fixed slot

How can you earn money with forex trade?
Foreign exchange rates are dependent on a lot of market and economic factors, such as export imports crude oil prices market drivers and many such more. Let’s understand how you can make money in forex trading. Suppose, due to some economic variables you expect the rupee to depreciate, i.e. you think that the rupee will lose some value against the US dollar and buying the US dollar will become more costly. Assuming the US dollar is trading at 70 rupees and in two months the price is expected to move to 72. A trader can buy thousand US dollars for 70 rupees now and the total cost of the transaction will need 17 thousand 70,000 rupees. After two months, the price of the US dollar moves to 72 rupees. Here he goes out in the market and sells those thousand US dollars and he will be earning 72,000 rupees a profit of 2,000 rupees.

However, do not make the mistake of assuming that forex trading is as simple as explained in the example. In real time, the training goes much deeper involving applications of several techniques.
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