What Differes the Forex Market from Other Financial Markets?
Although forex is the largest financial market in the world, this market is a relatively foreign investment area for retail traders. Especially for those of you who just know him. Until online trading became popular a few years ago, forex is still the main domain for large financial institutions, multinational companies and hedge funds. But times have changed, and individual investors want to know information about this exciting market. So what distinguishes the forex market from other financial markets?
Unlike stock markets, futures or options, currency trading does not occur in regulated bourses. In general, forex trading is not controlled by the central governing body, there are no clearing institutions to guarantee trade and no arbitration panel to adjudicate the dispute.
At a glance, this ad-hoc rule seems confusing to investors who are accustomed to trading structured on the Exchange such as the NYSE or CME. Partisans in the forex market must jointly compete and cooperate, self regulation into effective control of the market.
Further developments, the leading retail retail dealer (liquidity provider / bandar) in the United States is a member of the National Futures Association (NFA). By joining the NFA they agree to use arbitration in case of a dispute. Therefore, it is important for any retail trader in the United States who intend to trade forex only through a brokerage firm that is a member of the NFA.
For in Indonesia, it is advisable for forex trading using a brokerage firm futures that become members of BAPPEBTI. The aim is to be protected from fraud or disputes that can be resolved through the Arbitration Body (BAKTI).
The forex market is unique and different from other markets. One of them is the concept of Two Ways Opportunity. You can do the selling without having to buy first. Unlike the stock market that must buy first then sell later. You are also not limited to the size of your trading according to your capital capability.
The forex market is also the most liquid market in the world. It is traded 24 hours from Monday to Friday so there is no price gap (except Saturday Saturday). Forex also has a wide, global coverage from Asia to Europe and North America, making it easily accessible from around the world.
Yes, the forex market does come from without rules until there is a rule. But this rule does not regulate forex trading itself, but rules for institutions or companies that want to shelter it.