What is Capital Formation in Forex Trading?

Capital formation, also known as capital accumulation, is an economic process where financial capital is accumulated in the form of savings, investments, and other activities aimed at creating capital assets. In the foreign exchange (Forex) market, capital formation describes the process of trading currencies so as to acquire a larger capital base, which traders can use in order to gain bigger profits in their investments. This is done by making use of various Forex strategies, such as leveraging, arbitrage, spread trading, and more.

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