There are many differences with trading Forex and trading stocks or futures. Forex trading usually offers higher leverage. Most brokers as a standard will offer 100 to 1 leverage. Other brokers may go to tie as 400 to 1. In many cases Forex trading offers more flexibility in order types. This may make trading Forex more attractive to those that are trading with automated systems.
One big difference between Forex trading and stock or futures trading is access to liquidity. It is well-established that when trading stocks or futures in order to have Cole location facilities the group usually has to be a large hedge fund. These funds have the advantage of speed and trade execution and usually can get their trades executed quicker than the retail investor. There are many Forex brokers that offer: colocation trading without the barrier to entry. These retail traders are placing their trades in the same location and at the same speeds as major financial institutions.
Trading stocks and trading futures can leave an account in debit. This means that there are not the controls in place to liquidate open positions to where the accountant does not go negative. It is very unusual for a Forex trading account to go negative. This means that the amount of money that is wrist on a particular trade is not truly the risk capital. Many stock or futures brokers would require a debit account to come in with additional funds to satisfy the account.
These are just some of the more overlooked differences between the Forex trading and stock trading.
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Trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. The effect of leverage is that both gains and losses are magnified. You should only trade if you can afford to carry these risks.Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Financial Services Guide (FSG) and Product Disclosure Statements (PDS) for these products are available from Core Liquidity Markets Pty Ltd to download at this website or here, and hard copies can be obtained by contacting the offices at the number above.Please also note that your call may be recorded for training and monitoring purposes. Any advice provided to you on this website or by our representatives is general advice only, and does not take into account your objectives, financial situation or needs. You should therefore consider the appropriateness of our advice before making any decision about using our services. You should also consider our PDSs before making any decision about using our products or services.Note that the information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer: Core Liquidity Markets refers to Core Liquidity Markets Pty Ltd. Core Liquidity Markets is an Australian firm registered with ASIC, ACN 164 994 049. Core Liquidity Markets is a Corporate Authorised Representative Number 443832 of GO Markets Pty Ltd AFSL 254963 the Authorizing Licensee and Principal.