Currency trading is becoming more popular among investors, several of them are even abandoning the stock market to get started in the forex market. For many who do not know the forex market, this may seem somewhat surprising. However, for the experts, it is not surprising at all - the Forex market has a number of unique advantages that make it very attractive.Open all day
Unlike stock markets, which open every day for a limited time, the forex market is open 24 hours a day on weekdays. Operations begin Monday morning in New Zealand and then develop at the pace of the solar cycle until the closing of markets in North America, which takes place on Friday afternoon. This means that you can trade a currency pair - such as EUR / USD - at any time, not just during business hours.
The size of the market
The foreign exchange market is the largest financial market in the world. Every day it trades with more than 5000 billion dollars, creating enormous liquidity. This means that no matter if you have a few thousand dollars or billions of dollars, there are always buyers and sellers willing to negotiate with you. This market is very difficult to manipulate because of its size, so that all investors have relatively fair trading conditions.
The low costs of negotiation
Every time you trade in the currency market, you need to take into account what each transaction costs. Fees, commissions and taxes always cut benefits, so finding a market with low bargaining costs is essential. From this perspective, the Forex market is probably the most economical financial market and is that trading on it is very cheap. This is due in large part to the intense competition that exists among their brokers, some of whom even offer to open a bonus.
High leverage
In terms of foreign exchange, you can get very far with a relatively modest amount of capital. Forex brokers offer a large margin compared to the margin that is given on the stock exchanges - instead of getting a margin of 2: 1, in the US. You can achieve a margin of 50: 1, which can be even higher depending on the countries where you operate. This means that if you have $ 1,000 in your account, you can open a position with a value of up to $ 50,000. This magnifies the effect of currency movements, which creates much greater profit opportunities - although it is essential to manage risk at these levels.
Strong tendencies
One of the best ways to profit in any financial market is to spot a trend and follow it. Generally, in the currency markets there are very well defined trends that can be extended to long periods of time. This makes it easier to follow the trend and get solid benefits. The reason for this is that the performance of the currencies is linked to the economic performance of a country in the long term, which tends to follow a relatively slow cycle. However, it is important to be careful of unexpected events - for example, the recent decision of the Swiss National Bank to release the minimum exchange rate of the Swiss franc against the euro caught many foreign exchange traders by surprise, resulting in significant losses in more Of a case.
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