Benefits of Trading the Forex Market

Forex Trading

Forex Market

FOREX

Foreign Exchange Market

The Forex market is a non-stop cash market where currencies of nations are traded. The forex market is one of the world's largest trading platforms available. Foreign currencies are simultaneously bought and sold across local and global markets, hence the value of currencies appreciate or depreciate in value based upon their movements. Forex Trading is not restricted to a trading floor and is not centralized on an exchange like the stock market. The Forex market has the following advantages:
 
It is a global round the clock market
The forex market is unique because unlike other stock and futures market, where you can trade only 7 hours a day, the traders can access a 24-hour market very conveniently, There is always and any time of the day a financial center open where banks, hedge funds, corporations, and individual speculators can trade currencies. Traders can trade during anytime of the day or night, and do not have to wait for any markets to be opened before placing their trades. This is a good part time option for people who hold nine-to-five jobs since they can trade it without any problems in the evening or night. The market runs 24 hours for 5.5 days a week because markets around the world open and close at different times.
 

FOREX MARKET

 
It is a highly liquid market
About 80 percent of foreign exchange transactions are dollar based and there are no liquidity issues when trading any of these currencies, namely, USD, GBP, EUR, CHF, JPY, CAD, AUD and NZD. On the other hand, with stocks, futures, options or commodities, you will be restricted by their illiquidity especially during after-hours. According to the Central Bank Survey of the forex market conducted by the Bank for International Settlements in 2004, daily trading volume reached an all-time record high of $1.9 trillion, up 58% from 2001. This daily trading volume is much higher than that of the New York Stock Exchange and the NASDAQ combined.
 

Trading

Forex Trading

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Leverage options
The forex market offers the highest leverage available for any market. This allows forex traders to execute trades up to $500,000 with an initial margin of only $5000. This type of leverage not only allows investors to maximize their profit potential, but their loss potential becomes equally large too. You can select the amount of leverage that you are most comfortable with.
 
Limited slippage
Most forex brokers guarantee covers on stop-loss and limit orders on up to a certain number of standard lots. They also provide instantaneous trade executions from real-time quotes which are displayed on the screen. There is no discrepancy between the displayed price and the execution price during normal market conditions. Unlike the futures and stock markets, execution price can be vague because all orders must be done through the exchange, and slippage and partial fills are common.