What is the meaning of Free Trading

      Free trading refers to the unrestricted purchase and sale of goods and services between countries without the imposition of constraints such as tariffs, duties and quotas. Free trade is a win-win proposition because it enables nations to focus on their core competitive advantage, thereby maximizing economic output and fostering income growth for their citizens. Formerly insular economies such as China and India have expanded at much faster growth rates since they adopted free trade principles in the 1980s and 1990s, respectively.

     Free trade enables nations to concentrate their efforts on manufacturing products or providing services where they have a distinct comparative advantage, according to the theory first espoused by economist David Ricardo two centuries ago. A free trade policy should enable a nation to generate enough foreign currency to purchase the products or services that it does not produce indigenously. The process works best when there are few if any barriers to entry for such imports. The imposition of artificial constraints such as tariffs on imports or the provision of subsidies to exports will introduce distortions and impede free trade.

     Forex market is also at other times referred to as interbank since banks trade with other electronically and the prices of the commodities might change as from one bank to the other. Forex trading account is just like a bank account where one can buy currencies and hold them. It is also worth noting that these currencies are usually purchased in pairs. That means that if one buys Euro against the US dollar, one is holding for the US dollar to become worth less against the Euro over a period of time. Therefore, for one make a profit in that transaction, the Euro must be worth more over that period of time. These brokers had to have a lot of money in order to buy the foreign currencies. Forex broker make money by taking some of the money whenever an investor makes profit.