The Many Differences In The Forex Markets

The Many Differences In The Forex Markets

Differences In Market

I am sure you know what the foreign exchange market is. If you do not, it is simple. It is a market value exchange one currency for another. When someone is making a trade in the foreign exchange market, they are basically purchasing or selling the currency of one country for another. There is absolutely no physical exchange of money, which means there is no exchange from one hand to another. Everything is done electronically, because the entire market exists electronically. This is contrary to what happens in foreign exchange kiosks.

For example, imagine someone is visiting New York City from India. They would be exchanging the Indian rupee for the US dollar, in cash. They may even be charged a commission fee to do so. This person can spend the money in the United States of America. This person could even spend the money in airports in other countries. But, when you exchange currencies in the forex markets, you are not charged a huge commission. In some cases, you are not even charged the commission. In the world electronic markets, traders are usually hoping to take a position in some specific currencies, and they will have hopes that there will be some upward movement and some strength in the currency that they are purchasing or even weakness, if they are selling, so that they can make a large profit.

large profit

In so many cases, I know a lot of individuals who get into the forex markets, so that they can trade currencies for a living, so that they can make a profit. In a lot of cases, some people end up making huge profits. It is basically like gambling, but without the lights, sounds or the intense atmosphere of a casino.

There happened to be some fundamental differences between the foreign exchange market and the other markets. First of all, there are much fewer rules, and it means the investors do not have to adhere to such strict standards or even regulations, as those in stock markets, options markets and more. It means that there are no clearing houses and no central bodies that oversee the entire forex market. Basically, the rules are much more relaxed. Keep in mind that you cannot cheat. It is not possible. Secondly, since trades do not take place on a traditional exchange, you will not find the same fees or even the same commissions that you would in other markets, as I mention above. There is absolutely no cut off, as to when you can and cannot trade, because the market is open 24 hours a day, five days a week. It is a very liquid market, which means that you can get in and out whenever you want.

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