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Joined Mar 2009
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Status: One pip at a time
|261 Posts
ForEx is simply Foreign Exchange, encompassing over-the-counter (OTC), inter-bank, contract-for-difference (CFD) etc.
When you say Forex you are probably referring to the inter-bank market; the difference is in who the market-maker is. CFDs are exchange traded, Chicago Mercantile Exchange being a major market place. Inter-bank runs through different systems, you access that through your broker, either with a dealing-desk between you and the market (meaning the broker in many cases becomes the counter-party to your position) or straight-through ECN.
The above is not a fully accurate explanation in a technical sense, but hopefully helps to grasp the concept.
Most CFD are a mirror of FUTURES that are traded on many exchanges like GOLD or indexes like SPX / Nasdaq. You can also find CFD for currenciers ( same there is futures for all major pairs arround ).
Beware CFD can be manipulated if you intend to trade heavily futures better use a futures broker.
hi just a quick question whats the difference in trading forex and forex cfds? regards damien
Ignored
The main differences between CFD trading and Forex trading is that CFD trading involves different types of contracts covering a diverse set of markets, such as indices, energy, and metals, whereas Forex offers pure currency trading. When you trade CFDs, you have the opportunity to select different contracts that vary in increment value and currency type, depending on the country in which the underlying asset originates. Forex trading is about trading one currency against another currency and always involves trading in uniform lot sizes.
A final difference between CFD trading and Forex trading relates to the general factors that tend to influence the different markets. CFD trading is mostly influenced by specific factors, such as supply and demand of a given commodity or trend changes associated with business sectors. Forex trading on the other hand is mainly driven by global events, like large employment shifts or international political changes.
{quote} The main differences between CFD trading and Forex trading is that CFD trading involves different types of contracts covering a diverse set of markets, such as indices, energy, and metals, whereas Forex offers pure currency trading. When you trade CFDs, you have the opportunity to select different contracts that vary in increment value and currency type, depending on the country in which the underlying asset originates. Forex trading is about trading one currency against another currency and always involves trading in uniform lot sizes....
