Have you ever heard of the term ‘Forex’? Yes? Do you know what it means? No?
Forex in the most basic term is a short form of Foreign Exchange. Now the matter of fact is what is the thing which we are exchanging here. Foreign exchange fundamentally is a term which its users use, when they exchange a currency. Let us throw a glance on what all does ‘forex’ mean!
What Is the Need to Exchange Currency?
As we are rapidly moving towards Global trade and things and commodities and people are moving across the globe at a very fast pace. For example, a student wishing to pursue higher education overseas may want to turn the money of his/her nation into that of his study destination. Meanwhile, you must be knowing that every country has a different currency except some of the EU (European Union) members who use the same currency.
So, when countries trade internationally and people go to different places, it requires foreign currency, and this is when currency exchange takes place.
Now, imagine this on a very huge scale happening everyday 24×7. This means we need special exchanges and services to deal with this type of activity. And, this is what we call Forex Trading.
As the title says Forex is the largest and the most liquid market in the world and the reason is simple, demand for foreign currency never falls short. According to the estimates, people trade foreign currency worth $5 Billion every day in Forex exchanges across the world.
So, now you know that Forex is an awesome trading opportunity and people make a lot of profit doing so. The US Dollar mainly dominates the forex. Subsequently, Euro, Yen, Canadian Dollar, and the Pound follow the activity close on the heels of the US Dollar. For this reason, many countries have given restricted access to forex trading while some have banned it totally.
As is clear from above, the Canadian Dollar is a close follower of the US dollar in terms of liquidity. So, most people try to trade in Canadian Dollars. That’s why mainly people from Canada are very active in forex trading. Still, the main question that arises is, is Forex legal in Canada?
Countries Where Forex Trading Is Allowed and Legal
- United States
- Canada
- UK
- Italy
- Cyprus
- Australia
- Germany
- Switzerland
These are some countries where forex trading is allowed without any restriction. Although there are nationalized forex trading services and brokers which are specified to indulge in forex trading.
Countries with Restrictions
These countries have strict policies regarding forex exchange. For example, in India, you can trade only in pairs of INR in Indian exchanges legally. These types of laws are made to avoid the high risks involved. The Indian government wants to ensure that there is no loss to the national currency due to the outflow of foreign exchange in case a trader suffers a loss. Meanwhile, below mentioned are the countries where using forex is restricted:
- China
- South Africa
- Russia
- India
- Ukraine
Countries with Totally Banned Forex Trading
- Belgium
- North Korea
- Israel
- France
So, as far as our list goes, forex is legal in Canada. still, it has different regulations in different states. So, we advise you to please read and research well about the rules and regulations before investing in forex.
I hope this article would have given you an insight into the most liquid trading market in the world – FOREX.
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