Unique Characteristics of the Forex Market VS Other Markets
There are many unique characteristics that you can find in the Forex market. Unique characteristics will certainly provide benefits for traders, even every day. Previous articles, also discussed about Forex Trading Advantages and Forex Market Sizes Provide Profits To Forex Traders. This time, you will see more, what distinguishes the Forex Market Vs Other Markets.
First, from the Volume side. The first difference between the forex market and the other markets is the market size. The Forex market is estimated to be close to $ 5.3 trillion a day, with most of the transactions concentrated on several major pairs. So the volume of transactions in all world stock markets that average about $ 84 billion per day becomes small when compared with the volume of the forex market. Yet the $ 84 billion per day transaction is great.
Having a large daily transaction volume can be a boon for traders. Especially when traders want to execute positions, either open or exit. Transactions are easy and liquid. Meanwhile, the nature of all markets is vulnerable to gaps. High liquidity at every price level is very good for traders to open and exit from the market quickly.
Second, opportunities in the 24 Hour Forex Market. Forex market is over the counter market which means it is not transacted through traditional exchanges. There are no daily opening hours and caps. Transactions are facilitated through the interbank market. This means trade can continue throughout the world during business hours and trading sessions in various countries. Therefore, Forex traders have access to trading almost 24 hours a day 5 days a week.
The Forex market also has no restrictions on transactions. You can log in, sign out, or modify transactions to your liking. This is very different from trading futures contracts or equities in regional exchanges. Forex trading lets you trade the strategy you want, whenever you want!
Third, the cost side. Most Forex accounts are transacted without commissions, and there are no expensive fees or data licenses. The trading cost is the spread ie the quotation of Bid and Ask price, which is always displayed clearly on your screen. This is very different from transactions in other markets. When a stock transaction or futures contract, you often have to pay the spread along with a commission to the broker, not including the cost of data for the current price and charting.