Uniqueness of Forex Tradingby InvestorGuide Staff
So what makes FX trading so different? Well, if an investor wanted to purchase stocks, options, or futures - they would need to ultimately go through some sort of regulated exchange - such as the NYSE. Currency traders have no such regulated mechanism overseeing transactions. What exactly does this mean for the average investor? An increased element of risk. Basically, there is no grand body overseeing currency trades. Therefore, the traditional safety nets like clearing houses, arbitration boards, or even an overall governing exchange do not exist. Currency exchanges are simply made between Forex members based upon the credit arrangements and conditions agreed upon before the transaction - yep that's it!