The Forex currency market is the largest financial market in the world and attracts more and more investors from all over the world. In this article we will analyze what are the main reasons for this growth and what are the advantages that you can take advantage of by doing Forex trading:
- Schedules
The schedule of the Forex market is one of its main attractions. As the phrase in the famous movie Wall Street says: "Money never sleeps," in Forex is fully realized as it is an active market 24 hours a day where there are always moves.
Due to the different time zones, whether it is 11am or 11pm, somewhere in the world, there are always buyers and sellers negotiating with currency pairs. (See article Best Forex Pairs to Invest in Forex).
While it is true, there are moments of greater movement coinciding with the 3 main trading sessions (Europe, Asia and the United States) and others with less that can be less advisable like the weekends. (See article Time to invest in Forex).
The flexibility of Forex schedules allows you to perfectly combine both your learning and your work as a trader with your current professional activity and do not need a dedication. This is more complicated when investing in stocks, indexes, since the sessions, for most people, usually coincide with their working day.
The fact that there are no session closures also results in gaps or price gaps being avoided at the next opening in the event of significant news in the hours that the market is closed.
- Liquidity
Forex is also the most liquid financial market in which more than 5 trillion is traded daily. It is a strong growth market in which it is very easy to enter and exit at any time.
This does not always happen in markets with lower liquidity, such as in the case of stocks. At certain times, you may want to sell a stock and find no buyer or vice versa. In Forex there are always buyers and sellers to act as counterparts to your trades, especially in the major currency pairs.
- Transparency and Security
Manipulation in a market as large as that of foreign exchange is almost impossible.
Any investor, however large, can not significantly influence the price of a currency. Even the relevant decisions of a central bank (which occur infrequently) can affect a currency in a timely manner but after a time will tend to stabilize in the direction taken by the majority of investors.
On the contrary, in the case of company stock prices may become adulterated or "inflated" without the knowledge of the investors, company balance sheets that give an image of the situation of the positive company may have been manipulated or "made up" From one moment to another the real situation is discovered and the stock price can sink, shareholders panic and everyone wants to sell without anyone wanting to buy so that the shares you have may not be worth nothing.
In Forex there is no systemic risk, nor does a currency disappear from day to day, which is why it is one of the safest markets in the world.
- Information to make trading decisions
In the case of investing in shares of a company you must be aware of and follow numerous factors: company balance sheets, presentation of results, changes in management team, situation of competing companies, important news in the sector, changes in strategy The company, important business operations achieved or failed, capital increases, entry or exit of important shareholders.
Much information is needed to make proper trading decisions and the worst thing is that this information does not reach all investors at the same time on equal terms. In many cases there is the exchange of privileged information between managers, main shareholders, who know the situation and important changes that affect the company before the rest.
On the other hand, in the Forex currency market virtually all the news reaches all at the same time, whether big investors, financial institutions, brokers to retail investors. The information you must follow to make your trading decisions about one or several currency pairs is much smaller.
Having a good economic calendar on hand is the best option to keep abreast of this type of news. We recommend that you focus especially on the most relevant ones as there are others throughout the day that will hardly have an impact on prices.
- Opportunities for profit
Although a certain currency is down, there are always opportunities to obtain profits in other currencies or in the same currency trading in the opposite direction.
In Forex you can make profits whether the price of a currency pair goes up or down. If you think the price is going up you can open a purchase position to close it later with a sale (go in long) but if you think the price is going down you can open a sale position to close it later with a purchase in short).
Buy cheap and sell expensive by going long or sell expensive and buy cheap by going short is the goal of the millions of participants in the Forex market. You have many currency pairs in which you can do trading and if you strive to learn and are disciplined you can get significant benefits in the currency market.
- Low Cost
Starting to invest in the Forex market does not require a high capital. You will need to open an account with an online broker who will act as an intermediary in the transactions you carry out. Today most brokers do not demand high initial deposits to open a trading account. You can take a look at this comparative table of brokers and as you can see there are asking for 100 € / 100 $ or even up to 1 $ to start investing.
Many brokers even offer welcome bonuses that increase your account balance by a certain percentage depending on the initial deposit you make: Brokers with Bonuses per Deposit
The Forex market is one of the financial markets with lower cost per operation. Most brokers apply their commissions mainly through a spread, the difference between the purchase price and the sale price. Being a market with a great liquidity this spread tends to be narrowed by supply and demand. Even the larger trading pairs have much lower spreads than less-traded or exotic pairs.
In addition you have a higher leverage for the foreign exchange market than for example that usually offered in shares. This way you can open a position with much more money than you have in your trading account and providing only a small part of capital as collateral. This allows you to maximize your profits but also requires caution as your level of risk also increases in the same proportion.
- Easy to learn and operate
Another great advantage of the Forex market is that you can learn and operate from anywhere in the world simply with an internet connection and a computer, a tablet or a mobile phone. The flexibility is total. That's why this market is so attractive to retail traders and growing day by day.
On the Internet you can find a lot of information to learn to invest, investment strategies, training material, although I anticipate that the most important thing is practice. And the best way to practice is to choose a serious and professional
broker forex terbaik di dunia, which is regulated by some demanding body, and open a demo account that will allow you to perform test operations with the same conditions as a real account but without jeopardizing your money.