Forex trading was once one of the best kept secrets of the financial world. As the largest financial market, it should have been very well known. However, it escaped under a lot of people's radar. Investors from all over are hungry for new, lucrative markets to get their hands on and Forex (FX) is primed for the investigations.
Forex does not trade futures, stocks, or options. It's a market where currency is traded. Unlike the stock exchange, FX doesn't have a board or panel that governs its actions, nor is there any type of arbitration process if someone feels that they were cheated by another trader. Members work things out on their own through credit agreements and word of mouth. Self regulation is the key to controlling the FX market.
Forex day trading can be like a vacation for the trader who deals with other financial products in the other markets. There's less governing bodies that you have to deal with, which in turn means there's less regulations and binding rules.
For instance, in the FX market, there's no such thing as an "insider trading". If you know something that can be beneficial to yourself and the exchange rate of a currency, then you can capitalize on it that information at will.
Before you get a mental picture of forex day traders carrying loads of cash ready to exchange, sell, or trade, you should understand a few things. The forex market doesn't really sell anything. Trades are done online and can be best described as a speculative market. The market exchanges one currency for another.
Forex does not trade futures, stocks, or options. It's a market where currency is traded. Unlike the stock exchange, FX doesn't have a board or panel that governs its actions, nor is there any type of arbitration process if someone feels that they were cheated by another trader. Members work things out on their own through credit agreements and word of mouth. Self regulation is the key to controlling the FX market.
Forex day trading can be like a vacation for the trader who deals with other financial products in the other markets. There's less governing bodies that you have to deal with, which in turn means there's less regulations and binding rules.
For instance, in the FX market, there's no such thing as an "insider trading". If you know something that can be beneficial to yourself and the exchange rate of a currency, then you can capitalize on it that information at will.
Before you get a mental picture of forex day traders carrying loads of cash ready to exchange, sell, or trade, you should understand a few things. The forex market doesn't really sell anything. Trades are done online and can be best described as a speculative market. The market exchanges one currency for another.
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