Primarily used for day trading, speculation and investment hedging.
- Largest and most actively traded in the world
- Provides volatility while there are no prominent trends on stock markets
- Allows hedging of equity portfolio
- Low transaction costs
The currency market not only offers leveraged trading opportunities, it also enables you to hedge your stock portfolios containing foreign shares.
The market is moved by easy-to-follow macroeconomic factors, such as expectations towards fiscal and monetary policy and statements by central bankers. The exchange rate is influenced by the economic situation of both currencies in the given pair.
Contrary to share prices, exchange rates are relative, i.e. the currencies in a pair are traded relative to each other. Therefore, the price movements are limited in time and Forex trading is most effective on the the short- to medium-term horizon.
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