Unlike other markets such as commodities, shares, and cryptocurrencies, forex maket doesn’t require an exchange before trading can be effected. It is a trade between two persons, in an over-the-counter market.
Why is Forex Trading SO DIFFICULT !
It is operated by major banks across four centers, namely, London, New York, Tokyo, and Sydney. These centers are in different time zones. Since the market is not centralized in a particular location, you can trade forex 24/5.
There are 3 types of forex market:
● Spot forex market: This type of forex trade takes place on the spot; hence, the name.
It is the physical exchange of different currencies between friends or family members.
● Forward Forex Market: In this type of market, an agreement is usually reached for the buying/selling of a particular currency at a future date.
● Future forex maket: This is very similar to the forward forex maket, only that it is legally binding on both parties that want to execute the trade.