Different ways to trade forex.

Different ways to trade forex.

Over the course of our communication we have learned that there are different ways to read forex charts, different ways to learn to trade forex and different ways to analyze forex market.

And that seems like enough, right? Nope! There are also different ways to trade forex. Bet you didn’t know that! But do not worry! I am here to tell you all about it.

There are four major ways to trade forexcurrency futures, currency options, currency ETFs and spot forex market.

Let’s start with futures as these are the most common way to trade forex that we hear about in the market.

Futures are the contract which are bout and sold for the price on a future date. Futures first came to light in 1972 and since then the forex market has really found more peace than in the last as the future prices for traders can be acquired right on spot at any given time.

Currency ETFs, or exchange-traded funds haven’t been around for as long as the three of its friends. But that doesn’t mean that ETFs are struggling to find its auditorium. On the contrary. It is one of the most reliable and useful trading tools as it shows exposure of a certain currency to a whole basket of other currencies.

ETFs were first created and are held by the companied and conglomerates who buy currencies and put them in a fund. Then the shares of the said fund are offered for the public trading. so, basically these companies turn forex trading into stock trading, that is why this type of forex trading is fully similar to the stock market.

There are four major ways to trade forexcurrency futures, currency options, currency ETFs and spot forex market.

Currency option. One more example of a good thinking in the forex market. Now I have to say that option trading has its disadvantages – for example those exchanges that allow options trading often have limited hours for that.

Now, what are option trading? Well, option trading gives trader a choice. There is no obligation to sell or buy an asset with the specific price when the expiration date on the option comes. That means that when you buy an option there is a choice for you – you can buy or sell the asset when the expiration date approaches.

And we are finally left with spot forex market. That is an on-the-spot currency trade. It is that simple. The market is open 24/7 and has tight spreads as well as high liquidity. There is also a very low price of going into this type of forex. Traders usually are provided with the news on trading situation and market research.

Now, while spot market is the most popular among its advisable to try all of them out in order to better understand the market.

Comments powered by CComment