Every business is fraught with risks. No exception and monetary activities. Currency risk - the risk that the transaction loss due to adverse changes in foreign currency or precious metal. Particularly vulnerable to currency risks of foreign trade. Exports may be disadvantageous due to the depreciation of the currency of payment, but import - as a result of increase.
Currency risks in banking are associated with the possibility of losses
on positions in foreign currencies or precious metals, open a credit
institution, due to changes in their courses.
Hedging of currency risks is carried out by entering into fixed-term foreign exchange transactions. This measure is carried out in order to avoid price fluctuations. Hedging - a way to protect funds from the movement of rates, which can cause financial damage. Current value of assets recorded by the transaction in the currency market. Among the international currency market Forex.
Choosing a strategy to hedge currency risk, we must remember that as a
result of the potential profit may also fall because of a well-known
rule of profit is inversely related to risk. Hedging - a way to not only remove but also minimize risks.
Knowledge of how to minimize the risks will help in trading on the Forex market. This is a great way to earn a changing exchange rates. It operates around the clock during all working hours, and thus allow the clock to make transactions and earn money.
Today, the opportunity to earn with Forex is a modest capital-holders, and those who have considerable financial assets.
In trading on Forex, as in any other financial activities have risks,
but the attention, the ability to correctly assess the situation of
affairs, financial analysis and the ability to predict the movement of
exchange rates - all to gain a substantial profit when trading Forex.