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Spot Forex Advantages

Forex spot trading is the buying of one currency with a different currency for immediate delivery, rather than for delivery at a future time. Forex spot trading is a trade that is carried out when two parties agree to buy and sell. Because the market is so liquid all Forex spot trades are filled instantly. This is a big advantage of the Forex trade, since this market is 50 times larger than the stock market and 15 times larger than the bond market. To recap, Forex futures are contracts that obligate two parties to buy or sell. Forex spots are the trades that occur between a buyer and a seller and are carried out instantly

The Forex market is made up the spot, futures and options market. This market, is also called the over the counter (OTC) interbank market. The spot Forex market has a 2 day delivery date, since this is usually due to the time it would take to move cash from one bank to another. Much of the speculative retail trading is done as spot transaction on an online trading platform.

To be able to be successful forex trader in the spot markets and make money requires learning how to trade the Forex spot market and understanding Forex trend indicators, plus having a good Forex trading plan. Forex spot traders need to learn charting and technical analysis, as well as Forex trading signals.

Traders like to trade the Forex Spot Market and it is popular and easy to get involved in Forex spot trading.

Banks originally developed Spot Forex trading in order to cater to the needs of big corporations which needed quick access to foreign currency to carry out a trade or investments. Overtime, spot Forex trading was made available to retail investors. Today this market has become so big over the years with independent deals from retail investors bringing tremendous growth to the Forex market. Now spot trading is done instantly such going to a money changer, becoming huge and growing by the day.

Spot trading holds some other measurable advantages over futures trading. Another one is that all futures are regulated and traded on the Commodity and Futures Exchange that happens to be regulated by the National Futures Association. The NFA imposes a fee for their involvement in carrying out the trades. However, spots are not regulated as they are traded on the interbank fx market, which is non-regulated.

Spots are also available at lower lot sizes than futures, especially when traded trough an mini or micro account.

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