FX Currency Trading – What Makes It Different?

The Fx currency trading known as foreign exchange trading is the exchange of currencies from the buyer to seller and a negotiated price which is the current rate of the currency in the market; it is commonly referred to as Forex. This is the largest market in the world with $2 trillion trade made daily; the market is open from Sunday 5pm and closes on Friday 4pm (EST). The currency market used to be a private club with its trading activities carried out by big co- operations, financial institution and wealthy individuals because the trade was not familiar to all. The advent of the internet, spread the popularity of the currency trade around the world, making it open for all to participate, hence it is now an open and free market for all to trade and benefit thereby. There are some factors that distinguish this market from other markets or trade the world over and some of these points are highlighted below:

The basic distinguishing factor is the fact that all of the FX currency trading activities are carried out online, this means that every trade made in this market is done through the internet, without a physical office of operation unlike the stock exchange or any other trade. All the trader requires is a computer system and an internet connection to begin buying and selling in this market.

The fact that it has a good leverage is another factor that  buy brics money makes the FX currency market different from others. The leverage of the Forex currency market is 200:1 meaning that with as low as one dollar a trader can control a currency investment worth two hundred dollars, but with the stock exchange it is a 100:1 leverage. There is also no commission fees attached to every trade made as it is in the case of other trading markets around the world. So, the trading has the opportunity to make more profits since he/she has no commission to pay.

There are no regulations governing the trading activities of the Fx currency trading meaning that dealers in this market buy and sell in an unregulated exchange. This show that there are no rules controlling the way traders sell and buy currencies. There are no councils established to control or execute judgments in the forex currency market, no clearing house to evaluate and give an assurance of the goods bought or sold – it is just regulated by the different traders themselves everyone buying and selling on credit agreement. This is why this market is referred to as the freest and open market. This is the most distinguishing factor of the foreign exchange market.


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