What is Currency Market???????

Currency Market is the market which plays on the fluctuation of Currency Rates. In an open Market Economy the rate of Currency is determined by the amount of Export the Country does. Thus the currency Market plays on the Level of Fluctuation an investor can think of and thus the Margin is his/ her income. This is one of the Fundamentals of Finance.

It is estimated that the currency market is a total of 6.6 Trillion every day in the world. Thus it is one of the biggest and largest market in the world. Traders trade on the upward and downfall of the trading price of the market. Thus they earn if the value of currency increase and lose if the value of currency decrease.

for example if a trader has purchased a Currency for $1 and it's value increased to $2, then the margin is $1 profit. Similarly, if a trader has purchased a currency for $2 and the price decreased to $1, then the margin loss is $1.

As shown in this image, if you purchase a dollar for your currency of 50 and if the price of a dollar increase to 100 of your currency, then you make 100-50=50 profit. Similarly if you purchase an Euro for 50 units of your currency and it increases to 100 units of your currency, then you will make 50 of your currency units profit.

If you want to trade on currency market, you can use platform like www.etoro.com and try some trade practices..

 

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Investment Rule

 One of the best Investment Rule is to never put eggs in One Basket. This means we have to diversify our Investment. This is because if one investment is in loss, it will risk whole of your funds. This is the investment Rule in financial Market. Once the relative risk of the portfolio is determined, it's return is calculated. For this the correlation of Returns of various Assets are calculated. The correlation is an indicator of relative risks. Thus a wise investment decision is the one in which there is a correlation between assets in portfolio Such that it provides a positive return.

 

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Portfolios

 Portfolios are the mix of investments which are done on various Assets. The Assets should be allocated in such ways that it minimises risks and Maximizes the return. Thus to make a portfolio, high risk products and low risk products should be mixed in proper ratio. This mixing should Minimise Risk and Maximize Return such that it Maximizes Profit. There are formulas to calculate the relative risks and Return.

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Realistic Investor

 A realistic Investor is the one who decides the return an investment should provide on the basis of realistic logic. For example we cannot expect an investment of $100 to give $1 Million return in a short period of time. Some might feel it is very unrealistic at all. Thus an investor should decide to earn on the basis of their logic rather than other things. An investor should always try to be realistic because it will protect his/ her Investment. Thus realistic Investor is what an investment soughts. 

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