Often many new investors wonder what are the benefits of Forex vs Stocks or even Futures. This article will help put some light to the debate.
1. With FOREX, you can trade 24 hours a day!
Except for certain hours during the weekend, the FOREX market is open twenty four hours a day. Very different from the stock market and futures market, each of which typically open at 9:30am, closing at 4pm EST, North America time. With the global activity in the FOREX market, you can trade any time it's convenient for you, night and day.
2. Pay zero commissions
Are you sick of paying more than $30 per trade for a basic stock transaction? Leave that worry behind when you trade on the FOREX market. A FOREX broker makes money using a spread, which is the difference in price between the quoted ask price and the quoted bid price for any individual currency that is traded. There is no money out of your pocket.
3. Enjoy instant order fulfillment
One major complaint about the stock and futures markets, and a sorry fact that can't be avoided, is that when trading on the stock or futures market, you will often experience a delay between the time you place an order, and the time it actually is filled. As a result, this small timing difference can result in making or losing additional money. Because there is a very high volume of transactions which occur every day on the FOREX market your orders are filled immediately, using the real-time quotes you see on your trading software application. While there are some times that the markets are more volatile, resulting in a possible minor delay, but generally you get the price you see on your screen.
4. There are no middlemen
Unlike those in the equity markets, FOREX traders have direct access to the market maker and don't have to use an intermediary. As a result, a FOREX trader will buy or sell directly through the entity deciding on the price for any particular currency pair. By eliminating an additional layer of communication from the transaction, FOREX traders will benefit from lower costs and have quicker trade access.
5. No unfair advantages
You've heard it before in the media; so-called experts telling you to buy when the stock price is falling, trying to assure us that the outcome will work out all right. Yet the party who is really making out on the deal is the brokerage firm issuing the buy recommendation, leaving the average investor suffering the damage. In the FOREX market, there is no undue influence by any single brokerage or individual, because this market represents the economic outlook of an entire country, and is not based on one party's opinion. It is far less influenced by market opinion.
6. Fewer choices make it simple
With more than 8000 stocks available for trading just on the NASDAQ and NYSE, there is a huge amount of daily news to follow to know what's going on in the market, not to mention having to do analysis of all that information before you trade. The FOREX market is much simpler to follow, since although there are several dozen different currencies available, the bulk of activity is in just four major currency pairs. This limited focus can significantly reduce the research you need to perform, and gives you a chance to get in the market faster.
7. Limits to risk
By using margin limits, FOREX traders must mitigate their risk. Whatever trading platform you choose, you will automatically receive a margin call when the margin required in your account is greater than the actual capital you have available. As a result, your risk is mainly limited to the total amount of money you have deposited in your FOREX trading account. When you are trading futures, there is always the risk that a margin call can occur at a loss, which leaves you responsible for paying any negative balance left in your account.
As you can see, there are certainly much benefits to trade Forex vs Stocks and Futures. If you are interested to find out more, click on the articles links on the left panel.
Quick Forex Tip #1
Forex trading is the largest known financial market. Day or night, it doesn’t really matter; the trade goes on even as half of the world is asleep. It offers a lot of opportunities for many organizations and individuals to make profit. There are many day traders in the market, and if you think you can do it, why not join the day traders. |
Quick Forex Tip #2
Don’t let your emotions rule you, especially when you're making trading decisions. A successful Forex trader should always be disciplined, and once you attain your objective, leave the market. Many times, people plunge in deeper because they are influenced by greed and fear. Don't be like them. |
Quick Forex Tip #3
Getting a good education about Forex trading will also let you increase your chances of profiting and decrease the risks involved. In getting the proper education in Forex trading, you will also learn how to read Forex charts. Forex charts are one of the most important things you should learn in order to successfully trade in the Forex market. Without this knowledge, you are doomed to fail in this very liquid market. |
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