Advantages Of Forex Trading
Forex trading has some really big advantages when compared to stock market or
share trading. Here are the big 4 benefits:
- No Broker Commissions – Forex
dealers do not charge broker commissions. Their income is derived
from the difference between buying and selling prices, which is also commonly known as the “spread”. On most
trades this is generally a fraction of one percent of the trade value.
- A market that is open 24hrs – The Forex market unlike the stock markets is
open on a 24hr basis 5 days a week. You can trade anytime between 0:00AM GMT on Monday morning to 10:00PM GM on
Friday afternoon.
- Stable market – It is virtually impossible for an individual or a company to
artificially influence the Forex market. This is as a result of massive volume of daily trading. This is very
different to the stock market where individuals can influence the value of share prices by for example insider
trading or by falsely sending out stories that will influence buying or selling activity.
- Trade on borrowed capital – You can trade on the Forex using capital that is
borrowed. This is known as margin trading. Basically you use between 0.5 and 4 percent of your own funds to
take control over a much large volume of borrowed money. The outcome is the ability to effectively leverage
your investment. The trading on the Forex is carried in lots, with a standard lot being $100,000, with some
dealers allowing you to trade in smaller lots known as Mini and Micro lots.
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