Forex market is one of the most liquid markets in the world, and one of the most alluring ones today. The name is short for Foreign Exchange, and it consists of the world’s strongest currencies of the world which you can trade one for another at any time.
That’s right – one of the many reasons that make the Forex market so special is the fact that this is the only type of market that never closes. It is open 24/7, suitable for the fast changes that are on it, so the traders wouldn’t miss anything happening.
Free For All?
One other important fact to note is that the Forex market is not under the jurisdiction of a single organization or an institution. Rather, a network of banks, computers, as well as brokers and individual traders contribute to the market being efficient and exciting.
Everyone has currency needs and will try to exceed them sooner or later. With the Forex market, you have a unique place where you can engage in all the purchasing and buying, without fear of missing out on anything. Here, you can watch how the currencies of the world are performing in real-time, creating a very special feature – Forex live.
The Forex market has one of the biggest trading volumes. Here you can trade as many currencies as you wish, and watch them through the Forex live feature. This way, you can take notice of many geopolitical, economic and other events that can affect the currencies. In addition, you can create a solid and functioning game plan accordingly.
The popularity of the Forex market is obvious through the establishments in some of the greatest cities in the world. Some of them include New York, London, Tokyo, Frankfurt, and Hong Kong. Each of these cities has a high functioning and alluring currency market, in which you can engage with other traders and trade currencies in whichever way you decide.
What Once Was
Historically, the Forex market was a tool to benefit the trade of governments and other institutions. It was significant for preventing the currencies from crumbling, as well as keep them in their peak.
This way, the economy of a certain country would grow even stronger, attracting more investors. This will then again bring to a stronger currency. This cycle did work, but it was still missing the key ingredient – inclusiveness. Over time, the Forex market became welcoming to anyone who wanted to engage in the excitement of currency trading.
How does this type of trading work? It is rather simple – you trade one currency for the value of another through a currency pair. For example, when you enter the Forex live feature on FXVC, you will notice that each currency is within a pair – for example, USD/JPY. This shows us the measure of the US dollar in comparison to the Japanese yen – through an index.
Then, each currency has its index when standing alone, but still, all the currencies are always traded in pairs. After all, you have to give something, to get something else back, of course.
And how does the electronic trading world benefit from all this? Since everything is online, you are not particularly trading real (fiat) money, rather the digital alternatives of it. Through each transaction, the broker is helping you achieve it as smoothly and as effortlessly as possible so they get a cut – this is called a commission.
This is a standard procedure in the world of trading, and currency trading is no different.
These types of transactions are referred to as spot transactions – they are done right away, which is necessary in the fast pace of the trading world. However, you should keep in mind that you cannot engage with the market on the weekends as well as holidays. That’s why this transaction could sometimes take up to 6 days if it was made during these days.
In addition, you can watch how the economic growth of each country is affecting the currency pair of your choosing even during these times through Forex live.
What about the rollover? This is a unique new and up and coming option available for traders and brokers. It allows them to profit solely on the transaction of two currencies through commission, no matter which two currencies they are. Rather, they profit from the difference between the two currencies during the transaction. This difference presents itself through either credit or debit for a certain interest rate. You see it as the difference between the two currencies.
There is another type of transaction which differentiates from the spot transactions, and these types are called forward transactions. This rate is the spot rate, but after adding the difference between the two currencies in different markets. This contributes to a much broader range of opportunities for each trader. This way you will have access to all the markets of the world while being able to watch how each currency is performing in a certain country. This is possible through the Forex live option.
A forward is a specific type of contract that you can create in relation to any currency and any amount of money. In addition, you can decide on any specific date outside of weekends and holidays when the trades won’t take place.
As for any other asset available on the market, Forex has its own futures, as well. A currency future is a contract between two parties where they settle an agreement to deliver a set amount on a certain date. This is called expiry, which will happen in the future. Unlike the forward, these terms are non-negotiable. Rather, the two parties need to settle all their details beforehand, or else they won’t achieve the common goal through futures.
Looser Regulations – is it a Good Idea?
There are also many other differences that make the Forex market unique from all the other markets. One of the first that comes to mind is the fact that the regulations are far less strict. This, however, doesn’t mean that the world of currency trading is ruled by anarchy.
Rather, fewer regulations give more room for each individual trader to come to their own and find what works the best for them. Through these genuine transactions, each one of the clients can form their own trading strategy. Later on, they can watch the fruits of their labor come in through their bank accounts.
This brings us to another important difference. Since there are no strict rules, different brokers may charge different amounts for fees and commissions. This allows you a broader range of choices, as well as requires some additional research on your way to finding the perfect fit for your trading needs.
The amount on the fee can fluctuate depending on the amount of currency you are choosing to trade. In the trading world, everything is at the top of your reach. This makes it somewhat easier to make your decision and decide on the next step in your game plan.
When it comes to trading currencies, leverage is the highest one as opposed to any other market. And while this may sound promising, it can also be quite intimidating. Since the higher leverage can get you bigger profits, but also a bigger risk. But this is all common in the world of trading, which is why it isn’t strange that it happens in the currency market, as well.
No Matter Where You Are
Another unique aspect of the Forex market is that it does not have one particular center where all the magic happens. Rather, you can find it all around the world and conduct electronically through the OTC system, which stands for over-the-counter. Meaning, all the transactions occur through the network of computers, so it doesn’t matter where you are or when are you attempting to make a transaction.
Today, most investment banks and commercial banks are conducting these transactions on behalf of their clients. This, however, doesn’t mean that you can’t make progress on your own – since the market is always evolving. There is always a chance for a sole investor to make it on his own and not be tied to any bigger institution to guide him through it all.
The currency market is quite volatile, too. This happens because there are so many different factors that can affect the value of a certain currency. This changes quite a lot, and there is no way to determine what will happen next. That’s why each trader can speculate on their own what will work best for them and their particular trading strategy.
Uniqueness at its Finest
In the end, there is no particular plan which is full-proof and that works for everyone on the market. But this is the basis of its appeal, too. Each trader approaches the market with their own unique strategy, and who knows where that will lead him.
Though the option of social trading creates opportunities to compare your success and your strategies to other traders’. This way you can find what works best for you alone. It is the sole purpose of market trading. And through that research and the process of finding yourself, you will notice how easy it is to comply with market demands. On the other hand, it also contributes to it with your uniqueness and special skills.