Confusion is education’s obvious counterpart. Especially when talking about a very complex sphere such as Forex, many questions seem to arise from the general public.
What is Forex?
In a sense, Forex is a dynamic basket of foreign currencies and exchanges. The full description reads as ‘Foreign exchange’ and houses the process of changing one currency into another. The Foreign Exchange market is decentralised by nature. It lives completely online and uses a great variety of different countries, currencies, and commodities.
The main actors of the Forex industry are far and foremost the broker itself, who provide the trading services, and its clients, who use them and are regular people.
Forex services rely on the essential relationship with liquidity providers. They function as mediators who are highly required to give traders access to the Forex market, offering the most accurate value estimation for the traded currencies.
Global Forex brokers operate in a multitude of countries. They are often allowed to operate globally through multiple international documents. Just as OctaFX is an international business company, it’s equipped with the required set of incorporation documents, allowing it to offer global financial services to clients worldwide.
An essential advantage of working as a globally recognised Forex broker is the trading conditions they wish to offer and secure for their clients. Global Forex brokers have a wider variety of instruments on offer with fair and competitive trading and investing conditions that otherwise would simply lack on the Foreign Exchange market. Therefore, opportunities arise that wouldn’t be attainable under other circumstances.
As discussed above, decentralisation for the Forex market is vital. It operates online and utilises a wide variety of different regions and even continents, national currencies, and commodities. Even local brokers must use some features and advantages of international partners, such as payment systems and other services. So, it sounds like it can’t be limited to one particular country entirely.
Yet, there is one more financial instrument that people often confuse with Forex. One cannot mention enough that clarification on this matter is in high demand. Let’s take a look at some essential differences between the two.
Binary options as financial products have an expiry date (those ‘fixed time frames’ mentioned above), whereas Forex does not. But in both instances, you speculate on whether a given asset will go down or up.
Forex grants its traders the application of individual profit targets with the Stop Loss orders. Both are unavailable for binary options. In the latter, the trader needs to win the majority of trading bets to have a successful, profitable long-term track record.
Thus, being fully prepared for market behaviour, taking risk management seriously and accumulating relevant knowledge, they can be sure to develop a profitable overall position after some skilful trading patterns.
Once again, Foreign Exchange is decentralised but at the same time a globally regulated and deeply established financial market. Moreover, binary options are not Forex, and Forex is not binary options, let alone any kind of gambling as some on the internet are attempting to claim. There is a craft to learn and regular profit to be made, even recurring income. But as with any legitimate endeavours to thrive on the financial market, one has to be ready to train their skills through education and learning.
