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Forex
vs Stock Market
You
will find that that trading in the Forex market has numerous
advantages over trading stocks or futures.
Commission-free
trading - It does not charge
any commission or transaction fees to trade. Because of the
over-the-counter (OTC) nature of the Forex market, as well
as the fact that it is an electronic network connecting traders
directly with market makers with no middle man, transaction
costs are greatly reduced. This reduction in cost is passed
on to the investor through some of the smallest spreads available
anywhere.
24-hour
trading -
The Forex market is a true 24-hour market. This is a major
advantage over any other market because at any time, day or
night, you will be able to trade and there will always be
buyers and sellers. At 5pm on Sunday, New York time, the financial
centers in Sydney and Singapore open for business and trading
begins. The market in Tokyo opens at 7pm, followed by London
at 2am and finally New York at 8am. These all overlap to provide
for a seamless 24-hour global market throughout the week,
allowing traders to react to news by trading immediately at
any time. Traders do not have to worry about limited after-hours
trading activity because in the Forex market, all hours, except
on the weekend, are market hours.
Unbeatable
liquidity -
As the largest financial market in the world, the Forex market
has the advantage of superior liquidity. With daily volume
of $1.5 trillion, it is fifty times larger than the New York
Stock Exchange. Simply put, there are always going to be buyers
and sellers around the clock, and traders will almost always
be able to open or close positions at fair market prices.
400:1
leverage -
We offers investors leverage of 400:1, meaning that you can
trade $100,000 lots by putting up just $250. In equity trading,
your maximum margin is 2:1, or 50%. This superior buying power
is one of the reasons that Forex trading has gained so much
popularity and interest over the years.
Profit
potential in any kind of market -
The nature of a Forex transaction is the simultaneous buying
of one currency and selling of another. That means that there
exists the potential to profit when the market is going up,
and even when it is going down. In equity trading, there exists
a "zero plus tick" rule, limiting when an investor
can sell a stock short. No such rules apply to Forex trading
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