Let us now learn forex and how the framework is set. The export earnings of business houses, overseas transfer of funds and investment flows through direct or borrowed capital are the main sources of foreign exchange. The individuals or entities who receive foreign currency through some means are in a lookout for selling the same currency to licensed exchange dealers who in turn will sell the same to another individual or entity who are ready to purchase the foreign currency.
This is a usual foreign exchange that happens and the profit that one gets from buying and selling depends on the rate of currency at that particular point of time. The central banks of different countries play a major role where in they sell their currencies and buy other currencies to make some market adjustments. It all depends on how the price is determined and what opportunity is created for the investors, the buyers and sellers to take advantage of the change in price.
And that is the reason you should learn forex and know why it is called the forex trading. An entity, a bank or an individual who is buying a currency today may turn out to be a seller the very next moment or the next day. This is done to take advantage of the fluctuating rates.