Though forex and other trades are from the same grounds, yet there are substantial differences between them. A few unique characteristics of the forex market make it unique. And young trader Sahil Ali describes how trading in the foreign exchange market is not the same as regular trading.
Sahil states the four fundamental discrepancies between the two trade markets, these are:
- Forex trading takes place in pairs
In the stock market, the stock is a commodity. Whereas in the forex market currency is a commodity, says Sahil. This means trading takes place with and for currencies, the process of buying and selling occurs simultaneously in the forex market. As currencies are always traded in pairs, which happens in no other market.
- Forex has a huge market and high liquidity
Underlining one of the biggest differences Sahil comments on the size of the market. The forex market trades in an estimate of $5 trillion a day which is much vast as compared to any other market. It gives more opportunities to traders than any other. The elevated volume of the forex market is also a reason for high liquidity.
- Forex trading requires no commission
The forex market has no broker which simply means no commission. The forex market does not have brokers charging any fixed cost, says Sahil. However, some intermediaries may be rewarded if they bear the risks.
- Forex trading is done 24×7
In the forex market, trading is facilitated through the interbank market making it flexible to trade around the clocks throughout different countries. Whereas other trading markets are confined with the time and don’t work beyond that.
Sahil Ali started understanding trading when he was just 13 years old. Today, his vast and extensive knowledge in the field of foreign exchange has helped him to strengthen the walls of Costafx Technologies Pvt. Ltd