Today's version of my trading tutoring is based on the various Ways to Trade Forex. Having known how large the FX Market is, approaching it with one style would have only caused a bump in the market.
When it gets to Forex Trading, there are instruments involved, the most popular ones are;
retail forex,
spot FX,
currency futures,
currency options,
currency exchange-traded funds (or ETFs),
forex CFDs, and
forex spread betting.
Also, let's take note that this article is specifically pointing out how individual traders carry out trading activities on Forex and not the institutional traders.
Take a sip of coffee while I take you down to ways you can partake in the giant Forex Market.
What Are Currency Futures?
In Forex, there are contracts made to buy or sell a certain asset at a specified price on a future date, These contracts are called the Futures. It shows in details the price at which a currency could be bought or sold with a specific date at which the exchange would occur.
What Are Currency Options?
This is a financial instrument that gives the buyer the option to buy or sell an asset at a specified price on the option’s expiration date.
What Are Currency ETFs?
Individual traders on the FX Market are offered exposure to managed fund without the burdens of placing individual trades. They are likewise used to speculate on forex, diversify a portfolio and also manage currency risks
The Retail Forex
In our normal markets, we have traders who trade in bulks and those who Retail. Same is applicable in the FX Market.
For those who are less Richer and can't trade in large quantities, there's still room to trade on the FX Market.
In Retail Forex, Forex trading providers trade in the primary OTC market on the individual's behalf. They find the best available prices and then add a “markup” before displaying the prices on their trading platforms.
Forex Spread Bet
There are traders who's pattern of participating in the FX Market is to predict the future price direction of a currency pair. This act is called Forex Spread Bet.
An individual's profit or loss usit the Forex Spread Bet is determined by how far the market moves in his favor before he closes his position and how much money he staked per “point” of price movement.
Forex CFDs
Contract for Difference abbreviated as CFD is a financial derivative. In Forex, the CFDs are contracts to exchange the difference in the price of a currency pair from when you open your position versus when you close it.
With the CFD, one gets the opportunity to trade a currency pair in both directions and if the price's direction favours your direction, you gain profits and lose when it opposses your direction.
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