Trading is the foundation of livelihood. You spend time and effort at work to earn enough money to buy something. And that something is made through somebody else’s time and effort so they can buy something. However, there are other professions that take the art of trading more literally. A tale as old as time, our ancestors have been in the barter business since the beginning. And as such in the modern age we still are trading away but this time we use currencies. Thus created the marketplace known as the forex market.
But what is the forex market and how is it any special than any other marketplace? Well then, you have come to the right article because this will tell you all you need to know about the difference between the forex market vs other markets.
Fewer Rules on the Forex Market
The forex market is known as the largest trading place in the world. And you would expect that a marketplace that large would have a strict set of rules. However, you would be surprised to find out that there are actually fewer rules here than in any other trade market. And that is simply due to the fact that there is no governing body overseeing the market.
What this means is that you, as an investor, are not tied down by strict rules and regulations. You are more liberated here than in other markets such as stocks, futures, or options. You can never run out of securities to share on the forex market. Because what you buy, you also sell. And therefore there is a continuous cycle.
Varying Fees and Commissions on the Forex Market
One great thing about Forex is how it is unregulated. However, not everything is sunshine and rainbows. Because of the market’s unregulated security, brokes can charge fees and commissions based on the amount of currency traded. Thus, forex brokers manipulate the fees by increasing the spread of currency pairs. In addition, forex brokers are known to charge you a somewhat baseless commission charge.
Full Access to The Forex Market
One great thing about the market is that its available 24 hours a day for 5 days. Because of that, you essentially have free reign to trade anytime due to the market not having a cut-off. The only exception being on weekends and global holidays like Christmas.
The market generally allows the use of leverages. The leverage can go return into a high amount if used properly. For example, a trader who purchases a thousand dollars worth as capital can get a return as high as fifty thousand if done right.
You must be aware that leverage can backfire due to it magnifying both profits and losses.