SHARETIPSINFO >> Articles Directory >>Advantages of trading in foreign exchange
Forex trading has many advantages that have attracted so many investors all over the world to invest in the Forex market. Especially with the trading system being completely online and convenient there are more number of people investing in the Forex market. Here we are presenting some of the most prominent advantages of trading in foreign exchange.
Largest Market – Forex market or the Foreign exchange market is the largest in the world in terms of volume and worth. If you consider the global Forex market together it is worth trillions of dollar. So it can be understood that Forex trading has great opportunities for the investors. While other financial markets like the stock market can be saturated, there is always an opportunity as a trader at the Forex market.
Leverage – While trading at the Forex market you can get the maximum leverage. That means with little investment you can trade for much bigger amounts. There are some brokers who offer leverage of 200 to 1. So you can trade more than 200 times of the fund you have. For example, if you have $100 in your fund you will be permitted to trade for currencies worth $ 20000. This is a great advantage of Forex trading that lets the traders get more profit with considerably less investment. But of course if there is chance of loss this high leverage can be the reason for more loss at the Forex market.
Round the clock market – If you consider the global Forex market it is open round the clock. So no matter what time it is, you can trade at the Forex market round the clock and throughout the week except for a few hours at the weekend. This makes Forex trading lot more easy and flexible for any trader located at any part of the world. So if you are thinking about Forex trading you can easily do it at your convenient timings.
Online trading – The online Forex trading have made the world of Forex trading completely effortless. The online Forex trading portals and the automated Forex trading systems or the Robots help the traders to a great extent. These robots are designed to take care of several aspects of Forex trading including displaying the real time quotes of the currency pairs, analyzing different signals that are determining factors of the Forex trading etc. These robots can be used effectively for trading at the Forex market. This is one advantage that has been instrumental in making Forex trading so much popular all round the globe.
Low Brokerage – You possibly get the least brokerage rate at the Forex market. For example for the highest trading currency pair that is Euro and US$, most of the brokers charge as low as 2 pips. In fact if you can search a little more you can find lower rate than this as well. As the brokerage rate is low, you can make more profit from trading at the Forex market.
Stable Market – If you compare the Forex market with any other financial market you will find out that it is the most stable of them all. While in the stock market a certain stock can move up or down as much as 15% in a single day, in Forex market the currencies do not fall or rise more than 1% within a day. So it is right to say that Forex market is quite stable in comparison to others. As trader it is a great advantage to trade at a stable market as you will have more chance to reduce your loss and recover the loss that you have made.
Focused Trading – As a stock market trader you have to keep watch on the whole stock market as well as on the movement of the so many stocks – some that you have already invested in and some that you are looking forward to invest in. On the other hand in Forex trading you will have to consider the four major currency pairs that are largely traded all over the world. So you have got less diversion and you can keep your self focused. Therefore, there is always little chance for you to miss an opportunity for a good trade.
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