Money Trading

Foreign exchange or money trading is usually coped up in pairs. In money trading, one has to buy the currency of a particular country. You do it by exchanging two currencies. This will give the exposure of facing various dealings within or out of the country.

It includes all the various components of buying, selling, and exchanging of currency at a price that is subjected to fluctuation depending upon various factors.

The traders, investors, and brokers are usually affiliated with banks around the world. They include different and multiple buyers that purchase currency and sell to another country keeping a percentage of increment that refers to profit.

Most popular countries involved in money trading:

Many countries have fame in money or currency trading. These countries especially U.S is also called greenback as it is the first and foremost in the world of money trading.

Few other countries include:

• Japan
• Europe
• Britain
• Canada
• France

Most popular currencies:

Every currency has some appealing features that attract the investors.  Moreover, the change in the value of each of them has a great impact on the overall market and trade. It is the most prior and important factor in becoming a sharp participant in the foreign exchange market.

1. The U.S Dollar ($):

In the marketplace of money trading, the US dollar stands on the first position. It has a higher value in the market and it is a center of gaining profit. It allows the participants to have a fine amount of increment to earn. Actually it is used as the standard currency for most of the commodities.

2. The Euro:

This is the second most traded currency after the US dollar. It also has the largest reserve currency around the globe. It is the most “politicized” currency that is actively participating in the foreign exchange market.

3. Japanese Yen:

Japanese yen is popular among Asian countries and gives them a chance to enter for money trading. It is also very famous in the field of money trading. But it has somehow low interest rates.

4. The Great British Pound:

British pound is based on the overall strength of the British economy. It helps in the stability of its government too. It also has a core value in the money trading market due to its relations with its peers.This currency has a strong benchmark that makes it popular.

5. The Canadian dollar:

The currency of Canada also reports in the currency trading. It is also famous because of its large export of commodities such as crude oil.

6. The Swiss Franc:

The currency of France is also a frequently bought and purchased money in trade. This currency is also renowned as it is very volatile and is purely active. It also keeps interest rates in check.

Advantages:

1. The money trading business is for everyone.
2. It is a 24/7 market that helps in attaining the revenue.
3. It has the largest financial market.
4. It has low cost on transaction.
5. It has lessened the drawbacks as compared to the barter
6. It also promotes the increment of productivity and efficiency.
7. It facilitates exchange of goods and services.
8. Money is very popular as it is accepted as a medium of exchange.

Disadvantages:

1. It has a high level of risk.
2. Small scale individuals are not able to participate.
3. Unpredictability of currencies is also a negative aspect in the count of money trading.
4. A participant must be prepared for the sudden change.
5. It also has a risk of diminishing value of the currency.