How is Currency Forex Trading Different from Other Markets?

Currency forex trading is very different from other markets and was mostly traded by financial institutions until technology provided an outlet for the general public to participate in this market. Most markets are traded on a major stock exchange, such as the London Stock Exchange, but currency forex trading does not have a regulated exchange. Instead, members trade on currency pairs based on credit as there is no governing body of the forex markets.

Another way currency forex trading differs is that forex markets are presented in pairs. One type of currency is paired with currency from another country. Other markets only offer trades on one type of financial instrument at a time.

Shorting a currency is an acceptable form of trading and is another way currency forex trading is different from other markets. Shorting a currency pair is allowed since there is no uptick rule on currency pairs. An uptick rule is applied to other markets and requires a short sell to at least be higher than the previous price.

Currency forex trading is very different from other markets and takes some getting used to. However, many financial firms offer extensive learning opportunities on currency forex trading because many investors have begun to turn to currencies.

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