Well for novices, currency or Forex trading refers to the buying and selling of various foreign currencies of different nations to make money from the profits earned. This type of trading always happens in the form of pairs. This means that you have to buy one currency and sell another so that you earn profits between the exchange rates of the two. Here is a list of some of the most common and frequently traded currency pairs in the global markets in the recent years:
-European Euro (EURO) and US Dollars (USD)
-European Euro (EURO) and Great Britain Pounds (GBP)
-Great Britain Pounds (GBP) and Us Dollars (USD)
And here are some terminologies that you shall also need to understand for Currency trading India. The first current from the pair of two is known as the base currency in forex trading. For example if you are buying the Great Britain Pound or the GBP and selling US Dollars, then the pound is your base currency. However, if it is vice versa then the dollar shall be considered as your base currency.
There are a lot of people and even companies that are earning an insane amount of money through profits made by Currency derivatives trading . The main reason for this is the low margin money required which is just 5 per cent at the present. This means that if you wish to start off with a capital of one thousand rupees than you are in a position of actually trading twenty thousand rupees i.e. 1000 x 100/5. Thus getting hold of a considerably large position in the market is possible with a very small amount of money.