Most of your doubts got answered here.
What is Currency?
Any form of money issued by a government or central bank and used as legal tender and a basis for Forex trade.
What is Currency Pair?
The two currencies that make up a foreign exchange rate. For Example, USDINR
What is Forex?
Foreign exchange is the simultaneous buying of one currency and selling of another. Currencies are traded through a broker or dealer and are executed in currency pairs. For example: the Euro and the US Dollar (EUR/USD) or the British Pound and the Japanese Yen (GBP/JPY). The Foreign Exchange Market (Forex) is the largest financial market in the world, with a daily volume of over $4 trillion.
This is more than three times the total amount of the stocks and futures markets combined. Unlike other financial markets, the Forex spot market has neither a physical location nor a central exchange. It operates through an electronic network of banks, corporations, and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one time zone to another across the major financial centers.
This fact - that there is no centralized exchange - is important to keep in mind as it permeates all aspects of the Forex experience.
What is Currency Exchange?
An association or a company or any other body corporate that provide the trading platform for currencies
What are the different types of participants in Currency Market?
There are two main groups that trade in currencies. About 5-10% of daily volume is from companies and governments that buy or sell products and services in a foreign country and must subsequently convert profits made in foreign currencies into their own domestic currency in the course of doing business. This is primarily hedging activity. The other 90-95% consists of investors trading for profit, or speculation. Speculators range from large banks trading 10,000,000 million currency units or more and the home-based operator trading perhaps 10,000 units or less.
Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders, and hedge funds all use the FOREX market to pay for goods and services, to transact in financial assets, or to reduce the risk of currency movements by hedging their exposure in other markets. The speculator trades to make a profit by purchasing one currency and simultaneously selling another. The hedger trades to protect his or her margin on an international sale from adverse currency fluctuations. The hedger has an intrinsic interest in one side of the market or the other. The speculator does not.
How is the trading done in Currency Exchange?
Currency Exchanges are based on the online trading system. It is an order driven, Transparent trading platform, which is reachable to various participants through the Internet, VSAT, and Leased line modes operated by members or sub brokers spread across the country.
What is a derivative contract?
A derivative is a product whose value is derived from the value of one or more underlying variable or asset in a contractual manner. The underlying asset can be equity, foreign exchange, commodity or any other asset. The price of derivative is driven by the spot price.
How are the Currency prices determined?
Currency prices are affected by a variety of economic and political conditions, but probably the most important are interest rates, international trade, inflation, and political stability. Sometimes governments actually participate in the foreign exchange market to influence the value of their currencies.
They do this either by flooding the market with their domestic currency in an attempt to lower the price or, conversely, buying in order to raise the price. This is known as Central Bank Intervention. Any of these factors, as well as large market orders, can cause high volatility in currency prices. However, the size and volume of the Forex market make it impossible for any one entity to drive the market for any length of time.
How professionals determine prices in futures?
Two methods are generally used for predicting futures prices which are fundamental analysis and technical analysis.
Is delivery available in Currency Future contract trading?
No delivery is available in Currency Futures contract trading.