Currency trading doesn’t take place on a regulated platform like with stocks nor is it controlled by an overarching governing organisation. There are also no clearing houses to assure legitimate trades or an arbitration panel for disputes. All trades are based upon credit agreements. This business which is housed in the biggest, most liquid worldwide market is finalised via a mutual understanding and virtual handshake.
But that’s not the only way in which the forex market differs from others. Some other ways include:
- Uptick rule doesn’t exist like it does in stocks
- No limits on trade size. If you have the capital, you can trade it
- Insider trading is nonexistent. In fact, European financial data is often leaked way before it’s officially released.
While forex trading might seem like the wild wild west right about now, it can be conquered. Like we mentioned above it is the most liquid and fluid market in the world. Encompassing countries in all continents, the sheer size and scope make this market the most readily available in the world. Trading occurs 24 hours a day Sunday through Friday, and there are rarely gaps in prices.