Forex offers a string of unique merits for traders which the stocks don’t. There is a reason why the highly volatile market (i.e. forex) features a staggering average of $4 trillion being traded every day. As you go through the post you will be acquainted with the various reasons why this market has emerged as such a crowd puller. So read on to know more.
Opportunity to trade 24 hours
Forex is a worldwide market. Investors can trade continuously as per their convenience– as long as there is a market open in some part of the world. It opens with the markets opening in Australia on the evening of Sunday and closes with the New York markets closing on Fridays. As the investors can trade in accordance with European, US and Asian market hours, they can easily customize their own schedules (that of trading— click here
to know more about forex basics).
There is no need to mandatorily shell out a huge amount of money in order to be able to trade here. The cost of transaction is typically based on the spread, which is the difference between the buying and the selling price of the currency pairs.
One of the major reasons behind the affordability is the absence of middlemen. Now, spot currency trading has actually eliminated middlemen and you can trade directly with the market, in charge of pricing of respective currency pairs. Now, most of the centralized exchanges generally involve middlemen – located in the middle of the trader and the buyer or seller of the security. It means that there’s both more time and money involved. However, forex is decentralized with quotes varying with different currency dealers. Forex traders can quickly compare the quotes and gain access to these dealers. Entry into this market is substantially cheaper than that of setting up your own business.
Forex is characterized by high liquidity
Liquidity implies the ability of an asset to be transformed in to cash very quickly. So, here you can actually look forward to moving large amount of money in and out of the foreign currency with minimal movement of currency.
Besides, the one mentioned above, one of the noteworthy merits is that traders get sufficient time to learn about the trade via the demo account. This one helps you practice for a qualitative time. You can trade with fake money but under real market conditions. So it actually gives you a hang of what the real scenario would be like. However, one of the crucial aspects differentiating your experiences with real and demo accounts is the “money” involved. Since you will be winning or losing only virtual money in the demo account, you will not be experiencing similar emotional highs and lows as when you start dealing with your real money. Keep this point in view before you actually start trading, as “emotion” is one of the factors which very few traders have been able to master. Learn more about how this crucial aspect can make or break your game!