Advantages of Trading Forex:
As a Trader, one can find so many reasons and advantages in Foreign Exchange Market.
1. 24 Hour Market: Since the Forex Market is world-wide, trading continues as long as there is a market somewhere in the world. Trading starts when market opens in Australia on Monday and ends after market close in US on Friday. So there are opportunities to Buy, Sell or Close open positions anytime from Monday to Friday.
2. High Liquidity: As Forex is traded 24 hours with huge volumes, asset can be converted into cash quickly without any Price discount. This means, we can move large amounts money ‘into’ and ‘out’ of Foreign Currency with minimum price movement.
3. Commission Free Trading: Forex Brokers usually do not charge any Commissions or Transaction charges to complete a Currency Trade. The cost of trading Spread between the Buy price and Sell price.
4. Leverage: Forex Brokers provide 50:1 to 500:1 leverage. Some provide more than that also. Leverage is the ability to trade more money on the market than what is actually in the Trader’s account. When one finds the right opportunity, he can use the leverage to maximizing his Profits. But note that, leverage is a double-edged sword which can significantly increase your losses as well as your gains.
5. Not Easily Influenced: In Stock Market, “Operators, Brokers and Analysts” may influence a particular Stock by trading huge volumes and giving fake suggestions. But, the size of Forex Market makes it very hard for Governments, Banks, Institutions to influence the value of a particular Currency. The Currency Market is driven by global economic forces which are much harder to control or manipulate.
Which Reason Applies to You: With the above reasons, we think Forex trading is having more advantages than Stocks. If you like any of the above, you can consider trading Forex Market.