The reason for the popularity of Forex is so much awesome that traders came up with estimates of various currencies or inflation for investment. Among them, spot forex, currency futures, currency options and currency Exchange-managed funds (or ETFs) are the most popular.
Trade Forex in Different Ways
Futures are promises to buy or sell a certain asset at a specified price on a future date (That’s why they’re called futures!). Forex futures were created by the Chicago Mercantile Exchange (CME) in 1972. Since futures contracts are patterned and swapped on a centralized exchange, the market is very transparent and well-regulated. This means that price and transaction information are readily available.
It's a financial apparatus that gives the buyer the right or the option, but not the obligation, to buy or sell an asset at a specified price on the option’s terminus date.
If a trader “sold” an option, then he would be obliged to buy or sell an asset at a specific price at the terminus date. If a trader has "sold" it will be forced to buy or sell an institution at the time of expiry date. And Price action guide can help you to make your option profitable.
The disadvantage is that Market hours are limited for certain options and the liquidity is not nearly as great as the futures or spot market.
Exchange-traded funds or ETFs are the youngest members of the forex world. A currency ETF offers exposure to a single currency or bushel of currencies. Here’s a list of the most popularly traded currency ETFs.
ETFs are created and managed by financial institutions who buy and hold currencies in a fund. The restriction in trading currency ETFs is that the market isn’t open 24 hours. Also, ETFs are subject to trading commissions and other transaction costs.
Spot Forex Market
In the spot market, currencies are swapped instantly or “on the spot,” using the current market price. What’s impressive about this market is its simplicity, liquidity, tight spreads, and round-the-clock operations.
It’s very easy to participate in this market since accounts can be opened with as little as $100! Besides that, most forex brokers usually provide charts, news, and research for free.