Forex Trading Features -Know It!

Forex trading features a wide selection of menus generally not available with equities and futures trading.

Around-the-clock 24-Hour market, the highest volume and liquidity, customizable leverage and commission free trading stands out among all other forex trading features.

Few general key currency trading features in comparison to equities and futures are highlighted below.

Forex Trading Features

  • The largest financial market in the world
  • Opened for trading 24-hour around the clock from 20:15 UTC on Sunday until 22:00 UTC Friday
  • No costs or commissions is applied for executing trades
  • Provides greatest amount of liquidity
  • Traders can profit in both bull and bear markets
  • Instant execution with minimal slippage and errors
  • Short selling is permitted without an uptick
  • Offers greater customizable leverage

Equities Trading Features

  • Offers decent market liquidity
  • Opened for trading only from 9:30 A.M. to 4:00 P.M. EST (New York Time) with limited after-hours trading
  • costs and Commissions apply for executing trades and varies by brokers
  • Short selling stocks involve an uptick rule which could be frustrating to many day traders
  • Instant execution in many cases is not available which result in slippage and errors
  • Leverage offered is fraction of the leverage offered in forex market

Futures Trading Features

  • Market liquidity is limited, depending on the month of the contract traded
  • Limited market hours and are dependent on the product traded
  • The presence of exchange fees results in more costs and commissions and varies by brokers

Since the forex market is traded over-the-counter (OTC) without a centralized exchange, competition between market makers prevents monopolistic pricing strategies. In contrast equities and bonds market operate in a centralized exchange market.

In another words, companies listed on the New York Stock Exchange (NYSE) can only trade at NYSE and can have only 1 bid/ask quote. On the other hand, forex market which operates over-the-counter can have multiple market makers and thus have different price quotes at all the time.

For example, if consumers were to buy an Apple iphone, currently they can do so only from apple store. In this case Apple reserves the monopolistic price. However if Apple iphone were to be available to purchase from different vendors and manufacturers then price would drop. So consumer benefits from the competition between vendors and manufacturers.

All this translates to this -forex traders have better liquidity and better price quotes with minimal spreads due to increasing competition between multiple market makers.

Before you open a live account, make sure to check with your brokers all the specific currency trading features offered to you as their valued client.

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