Flights to quality: Unsettling international events can lead to a "flight-to-quality", a type of capital flight whereby investors move their assets to a perceived "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The US dollar, Swiss franc and gold have been traditional safe havens during times of political or economic uncertainty.[76]
One of the largest risks in forex trading is leverages. Most forex brokers permit you to hold a certain of money in your account but then leverage that amount by over 200 times. This could bring in a lot of profit if you are on the winning side, but on the other, an overwhelming loss if you should find yourself on the losing end. The best way to stay clear of this is to use some of the feature built in on the trading software, an example is the Stop Loss features and negative balances.
Traders are people who work on the Forex market, trying to ascertain the direction in which the value of a currency will go and make a trade for the purchase or sale of that currency. As such, by buying a currency cheaper and selling it for more, traders earn money on the Forex market. Traders make their decisions based on the analysis of all factors that can affect prices; allowing them to work out precisely in which direction prices are moving. You can make a profit on the Forex market when the value of a currency drops as well as when it increases. Furthermore, traders can make trades on the Forex market from anywhere in the world; from London to Timbuktu.
Forex brokers provide clients with resources to understand market activity and make fast, informed choices. These resources should include third-party research, research reports, and market commentary, alongside venues for sharing knowledge (community forums) and receiving advice and confirmation (live chat, email, and phone support). Exceptional brokers also include access to historical data, so traders can back-test strategies before allocating real money. (Experimenting with virtual trading is also a good way of getting your feet wet.) Alongside research options, we wanted to see education: opportunities to learn more about forex trading and platform navigation via articles, videos, and webinars.
The spread for EUR/GBP rises to 0.8532-0.8533 and you decide to sell your euros back into pounds at the bid price of 0.8532. The €10,000 you previously bought is now therefore sold for £8532. Your profit on this transaction is £8532 minus the original cost of buying the euros (£8415) which is £117. Note that your profit is always determined in the second currency of the forex pair.
Currency futures contracts are contracts specifying a standard volume of a particular currency to be exchanged on a specific settlement date. Thus the currency futures contracts are similar to forward contracts in terms of their obligation, but differ from forward contracts in the way they are traded. In addition, Futures are daily settled removing credit risk that exist in Forwards.[81] They are commonly used by MNCs to hedge their currency positions. In addition they are traded by speculators who hope to capitalize on their expectations of exchange rate movements.

One unique aspect of this international market is that there is no central marketplace for foreign exchange. Rather, currency trading is conducted electronically over-the-counter (OTC), which means that all transactions occur via computer networks between traders around the world, rather than on one centralized exchange. The market is open 24 hours a day, five and a half days a week, and currencies are traded worldwide in the major financial centers of London, New York, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - across almost every time zone. This means that when the trading day in the U.S. ends, the forex market begins anew in Tokyo and Hong Kong. As such, the forex market can be extremely active any time of the day, with price quotes changing constantly.

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