Forex Trading has several benefits as compared to stock or equity
trading. Due to the current
24
Hour Global Market - The Forex market is really a twenty four Hour
Global Market opens from Monday to Friday. The Forex market starts each
trading day from Sydney, Tokyo, London, and eventually to New York.
Regardless of whether or not it is in the day or night, there are
continually market participants actively trading the Forex market. Forex
traders can respond terribly quickly to any currency fluctuations or
breaking news immediately in contrast to the stock and future market.
The ECN's (Electronic Communication Networks) in stock and future market
are relatively new merchandise derived as an once hours extension to
the regular trading hours. Many of these ECN's have unwell liquidity and
there's no guarantee that a trade will be executed, or at a honest
price. Sometimes, stock or future market traders would have to wait till
the $64000 market opens the next morning in order to execute a trade at
truthful price.
Liquidity – The Forex market is the largest and
most liquid market in the planet. According to a survey conducted by the
Bank for International Settlements (BIS) in April 2007, average daily
trading volume for the Forex market reached an all-time record high of
US$3.two Trillion. A 71p.c increase from US$1.9 Trillion that was traded
in April 2004. This increase is due mainly to the participation of
retail investors utilizing broker’s electronic trading platform. This
tremendous turnover is additional than all the planet’s stock markets
combined on any given day. With a daily trading volume larger than all
stock market combined, this will guarantee value stability. With such
liquidity, Forex Trader can open or close a grip without much problem
and most significantly, will receive a truthful market worth.
Chance
to Create Money in Each Direction – There is no such issue as “bull” or
“bear” market in Forex. In Forex, it is of no concern whether or not
the economy is booming or in a very recession. For stock trading,
profits are usually made when the economy is booming. However we all
understand that the economic cycle is cyclical – all things that go up
must come down. This is not the case in Forex market. Regardless of how
major economies are performing, currency exchange rates are forever
fluctuating, and this in turn will give trading chance for traders to
gain profit.
Simplicity – There aren't many major currency pairs
traded on the Forex market. Therefore, traders might have a better feel
of price movement patterns and behavior. Where as in the stock market,
there's literally thousands of stock to observe and it is not easy to
follow thus many of them.
Small Trading Capital with High Profit
Potential – Nowadays, the minimum amount required to open a trading
account is but $300. Due to competition, some brokers might even settle
for much lesser amount. In Forex market, this little trading quantity
could probably earn tons of dollars per week. In stock market, this
could not be possible. Of course both market have potential to lose
furthermore, but within the Forex market, traders will create good cash
with much lesser trading capital.
High Leverage of 100:1 - a
hundred:1 leverage is commonly on the market from online Forex brokers.
This is substantially exceeds the common two:one margin offered by
equity brokers, and fifteen:1 in the futures market. Some brokers even
supply higher leverage of a hundred:1. However, it is necessary to
recollect that whereas this kind of leverage permits investors to
maximize their profit potential, the potential for loss is equally nice.
Leverage could be a double-edged sword and necessitates the employment
of proper money management. Without correct risk management, this high
degree of leverage cans also cause massive losses plus gains.
Demo
Account – Forex Trading contains a unique feature called “Demo Account”
or simulate account. This “Demo Account” permits the trader to trade
using real-time value on the broker’s trading platform with the precise
interface and function as a real account. With this simulated account,
Forex trader might gain real market expertise in trading without risking
any capital.
With Forex Trading unique advantages, its of very
little wonder that more and additional retail investors are
collaborating within the Forex market utilizing broker’s electronic
trading platform that are widely and easily available
uncertainty of the stock market, many stock
or equity traders are now thinking to trade the Forex market. Their main
question and concerned was why trade the Forex market? What are the
benefits of the Forex market as compared to the stock market? In this
text, I can go through a number of the benefits of Forex Trading.
