BENEFITS OF THE FOREX MARKET
Trading the foreign exchange (forex or fx) market has many advantages. Trading currencies is in many
ways more advantageous than trading stocks, shares or futures. Look at all the advantages below available to individual investors
1. 24-hour Trading
The forex market is a true 24-hour market. This means that a currency trader can basically choose his/her own hours to trade no
matter where they are in the world.
2. Low Minimum Investment
Trading currencies requires a lot less starting capital than day trading other traditional investments. Thus, you could start out
small in the currency market. Some brokers even as low as $300!
Forex trading offers much greater buying power 1 unit of currency can control upto 400 times more, this has the effect of
multiplying profits (and losses), traditionally if you buy a stock or share for $400 per share you have to pay exactly that!
With the forex equivalent you would need to have only $1 to contol that amount!
4. Low Transactions Costs/No Commission
Most brokers do not charge a commission, they make their money from the "spread" (and sheer volume of trading). Most firms
have a spread of 3 pips on the major currency pairs.
5. Superior Liquidity
The foreign currency exchange market is the largest financial market in the world. There is constant activity, you will be
"filled" quicker than you would on stocks & shares. There are always buyers & sellers all over the world!
6. Free Forex Training
Learn how to trade currencies online. There are many providers of courses one of the better Free ones is available by signing
up on our home page.
7. Easier To Trade
Traders need to concentrate on a few currencies only rather than sifting through thousands of stocks for opportunites.
8. Very Responsive To Technical Analysis
Due to the nature of the market being 24 hours and the most liquid, it is the most repsonsive to technical analysis, which can
make trading more lucrative if you receive the right education.
9. Can Make Money In Rising And Falling Markets
There are no restrictions to sell currencies short, unlike stocks which have to be sold short on an uptick rule. This means
that as a forex trader you can make money just as easily in rising and falling markets. This is because each currency instrument
is made up of a "currency pair", so when you say Buy (Go Long) GBPUSD it means you are buying GBP and selling USD, and when
you say Sell (Go Short) GBPUSD it means you are selling GBP and buying USD.
10. Free News & Charts From a Mulitude of Sources
Sometimes too much info is a bad thing, however with Forex being such a fast paced market influenced by many factors, things can
change quickly, especially if an economic number is coming out. It pays to know when this is happening so you can trade accordingly.
11. Better for trading in after-hours than stocks
Foreign Exchange trading does not have the problem of little/no liquidity "after hours" because the currency market is open
around the clock, obviously there are periods where there is more liquidity than others depending on which combination of World
Financial Centres are open for business.
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