Topic: Risk management
Forex trading is risky, but can also provide huge profits. It's actually pretty easy to begin with foreign exchange trading. Currencies is something you can use as cash position (term speculation) or one can engage in active trading in foreign currency (short-term trading). If you save on high interest account in Norway, it is common for people to save in Norwegian kroner. Savings in the bank means more than just get interest on their money, it also means that you save in a specific currency - in this case, the Norwegian krone. If one has faith in the Norwegian krone, it's not wrong to save the bank. However, if one is worried about the future prospects of the currency it saves in, so it's a bad sign. Icelanders who spared Icelandic crowns on high-interest account during the financial crisis of 2008 would have done it differently today. When we compare the value of currencies, they must be viewed in relation to each other. For example, U.S. dollars and Norwegian kroner (USDNOK), this is a currency in which the values of one currency in proportion to the value of the other currency. What is money? At one time you can get 5.50 for $ 1 million dollars, another time you might get 6.70 million for the same dollar. Money is not worth more than what it represents. A single dollar bill is physically the same today as tomorrow, but the value that this represents is in constant change. The paper itself has no value, that's what the money represents real value.