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Difference between Forex and Commodity trading

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Once you’ve decided to trade online, you may want to explore the commodities market vis-à-vis the foreign exchange market. A commodity market is one that trades in manufactured goods like oil, gold and many more products. Forex on the other hand is a global platform trading in currencies. While the market you choose for trading will depend on your preference and comfort level, this may again depend on several other factors that include your personal choice, regulatory aspects etc. With IC Markets Forex broker you can make a discretionary choice of your comfort trading.

IC Markets Forex brokers

Factors that influence trading choices:

  • Regulatory differences: The forex is wilder in comparison to the commodities market which is comparatively more regulated and you may feel more comfortable with the government on your side with commodities exchange.
  • Control: Both the markets have significant leverage. However, in the forex market with little funding you can control huge amounts.
  • Exchange limits: Foreign exchanges are usually traded with the help of brokers or in an inter-bank market, whereas commodities trade on an exchange and have range limits which when exceeded halts trade placing. If you are a commodity trader you may experience the up limit or down limit, but when caught on the negative side of either of these limits, your account could easily dissolve without much of your control. On the other hand while quick losses are not unknown to the forex market, these are lesser chances when you are unable to exit your trade.
  • Compromise: You could trade commodity based currencies if you are looking for a compromise. The Canadian, Australian and New Zealand dollar also fall under this category. The commodity currencies are known to pay higher than the market currencies.

With IC Markets Forex broker you can gain exposure to both the commodities world trading platform as well as foreign exchange trading that will enable you to make a preferred choice.

 

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