FINANCE

5 Types of Forex Trading

Exchange trading is the most popular type of forex trading. In fact, around 60 percent of the daily turnover of exchange trading is on this type of trading. It is worth noting that bitcoin trading is not an exception in this regard. But the difference between these two trading types is that with exchange trading one is buying and selling on the exchange, whereas with bitcoin trading one is buying and selling on one’s own wallet address.

Each of the different types of forex trading has its own specialties and advantages. That is why we have listed the 5 most popular types of forex trading below.

Equity Trading

One of the oldest and most common types of trading, equity trading involves buying and selling shares in a company. Every day this trading type generates a turnover of about $400 billion USD.

Risk-tolerant traders are active in equity trading, as they can benefit from the trading volatility of this type of trading. In fact, the market volatility that is caused by a fluctuation in the value of the stock is one of the most popular trading reasons of traders. Moreover, traders can use both debt and equity for executing trades. 

Options Trading

With options trading one can buy call or put options on a stock or commodity and protect against potential losses of the trade. 

So far options trading is only available in futures trading and this market still has a lot of room for development. To get started with forex trading, veracity markets com is best to consider. 

Commodity Trading

When it comes to forex trading, one can buy and sell one or more currencies. It is interesting to note that forex trading is almost as popular with commodities as with equities. That is why one of the most popular forex trading currencies is the gold.

After the current rise of the price of gold in the markets, it is going to be very interesting to see what comes next.

Swap Trading

Swap trading is the best alternative for the high interest-rate products that usually allow traders to invest a very low interest rate. Generally, it is the case that swap trades can be beneficial as this type of trading implies that the liquidity of the funds that are exchanged is a bit higher than in futures trading.

But as with any other type of forex trading, with swap trades the volatility of the currency fluctuates according to market forces.

Eastern Trading

About a quarter of the daily turnover of exchange trading in a currency is conducted in this type of trading. And while this trading type is not very popular among western traders, it is a lot more popular in Russia and Ukraine. That is why for example the Ukrainian hryvnia is one of the most popular forex trading currencies.

It is also important to note that many of the traders who prefer to go with the one of the above-mentioned types of trading focus only on forex trading. That is why it is important to learn at least a little about trading in the other types of forex trading as well.

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