Forex market basic: The foreign exchange market is called Forex or FX or currency market. It is globally decentralized market place for exchanging or trading the international currencies. Here anybody can buy one currency with the other currency according to the market value and on the other hand, anybody can also sell his currency to get other currency when necessary.
How the market runs? There is no exact controller to run this market. It runs when we helps it to run by exchanging our currency with other currency. Suppose, Bangladesh exports garments item to the USA and for this it earns $100000. Here, Bangladesh exchange garments with USD. Now if you want to go to USA then you need some USD to live in USA. So you need to buy USD with your BDT. Here, you exchange your BDT with USD. This exchange between two currency is called currency exchange. When this exchange occurs between two international currencies in global decentralized market then we call it is Forex market.
Who is buyer or seller? There are two persons must need to exchange two currencies. One is buyer who will buy your currency with his currency. And, second is seller who will sell his currency to buy your currency. That means, by exchanging your currency with other other currency, you will be both buyer and seller at a time. But, if you have more interest to buy another currency from others then you will be a buyer and second person will be a seller. On the other hand, if you want to sell your own currency to others then you will be seller.
Though I'm writing about Forex market, to make it easy understand I will give the example with our local exchange. Suppose, you need $5000 to visit USA. You will go to Banks or Money exchanges to buy $5000. If Banks or Money exchanges put TK.80 per $1 then you have to pay them 80 X 5000 = TK.400000. If they put TK.85 per $1 then you have to pay them 85 X 5000 = TK.425000. So, what will be the exchange rate, it depends on then. As you need to go to USA and for this reason you have to buy USD from them according to their rate. Finally, this way you are a buyer.
Now lets, unfortunately you changed your decisions of visiting USA for getting a bad news and now you need to sell your recently bought $5000. You simply go to Banks or exchanges. Now they can't give you the same rate as you buy from them. If you buy @ TK.85 per $1, now you have to sell it with @ TK.82 per $1. By this way you will be a seller.
Now calculate how much you profit or lost by exchanging your currency.
You buy $5000 = 85 X 5000 ;($1=TK.85)
= 425000
You sell $5000 = 82 X 5000 ;($1=TK.82)
= 410000
___________________________
Total lost = 15000 (in BDT)
More information will be updated soon. So remain with this blog.
If you are from Bangladesh, You can participate my forex trading course in Bagnladesh.
How the market runs? There is no exact controller to run this market. It runs when we helps it to run by exchanging our currency with other currency. Suppose, Bangladesh exports garments item to the USA and for this it earns $100000. Here, Bangladesh exchange garments with USD. Now if you want to go to USA then you need some USD to live in USA. So you need to buy USD with your BDT. Here, you exchange your BDT with USD. This exchange between two currency is called currency exchange. When this exchange occurs between two international currencies in global decentralized market then we call it is Forex market.
Who is buyer or seller? There are two persons must need to exchange two currencies. One is buyer who will buy your currency with his currency. And, second is seller who will sell his currency to buy your currency. That means, by exchanging your currency with other other currency, you will be both buyer and seller at a time. But, if you have more interest to buy another currency from others then you will be a buyer and second person will be a seller. On the other hand, if you want to sell your own currency to others then you will be seller.
Though I'm writing about Forex market, to make it easy understand I will give the example with our local exchange. Suppose, you need $5000 to visit USA. You will go to Banks or Money exchanges to buy $5000. If Banks or Money exchanges put TK.80 per $1 then you have to pay them 80 X 5000 = TK.400000. If they put TK.85 per $1 then you have to pay them 85 X 5000 = TK.425000. So, what will be the exchange rate, it depends on then. As you need to go to USA and for this reason you have to buy USD from them according to their rate. Finally, this way you are a buyer.
Now lets, unfortunately you changed your decisions of visiting USA for getting a bad news and now you need to sell your recently bought $5000. You simply go to Banks or exchanges. Now they can't give you the same rate as you buy from them. If you buy @ TK.85 per $1, now you have to sell it with @ TK.82 per $1. By this way you will be a seller.
Now calculate how much you profit or lost by exchanging your currency.
You buy $5000 = 85 X 5000 ;($1=TK.85)
= 425000
You sell $5000 = 82 X 5000 ;($1=TK.82)
= 410000
___________________________
Total lost = 15000 (in BDT)
More information will be updated soon. So remain with this blog.
If you are from Bangladesh, You can participate my forex trading course in Bagnladesh.
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