Trading the Forex market has ended up being incredibly popular in the last years. Why is it that traders around the world see the Forex market as a financial investment opportunity? We will try to address this concern in this post. We will go over come distinctions between the Forex market, the stocks market and the futures market.

Some of the benefits of trading the Forex market are:

Superior liquidity

Liquidity is what actually makes the Forex market various from other markets. The Forex market is by far the most liquid monetary market in the world with nearly 2 trillion dollars traded daily.

24hr Market

This one is likewise among the best advantages of trading Forex. It is an around the click market, the market opens on Sunday at 5:00 pm EST when New Zealand starts operations, and closes on Friday at 5:00 pm EST when San Francisco ends operations. There are deals in virtually each time zone, permitting active traders to select at what time to trade.
Take advantage of trading

Trading the Forex Market offers a higher buying power than numerous other markets. Some Forex brokers provide take advantage of as much as 400:1, allowing traders to have just 0.25% in margin of the total financial investment. A trader using 100:1 suggests that to have a US$ 100,000 position, only US$ 1,000 are required on margin to be able to open that position.

Low Transaction costs

Almost all brokers provide commission totally free trading. The only expense traders incur in any deal is the spread (difference between the buy and sell cost of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency set) in some pairs.

Low minimum financial investment

The Forex market requires less capital to start trading than any other markets. The preliminary financial investment might go as low as $50 USD, depending upon take advantage of offered by the broker. This is a fantastic advantage considering that Forex traders have the ability to keep their danger financial investment to the most affordable level.

Specialized trading

The liquidity of the marketplace enables us to focus on just a few instruments (or currency sets) as our primary investments (85% of all trading deals are made on the seven major currencies). Allowing us to keep track of, and at the end be familiar with each instrument much better.

Trading from anywhere

If you do a great deal of traveling, you can trade from anywhere in the world just having a web connection.

Some of the most crucial distinctions between the Forex market and other markets are described below.

Forex market vs. Equity markets

Liquidity
FX market: Near six trillion dollars of day-to-day volume.
Equity market: Around 200 billion daily.

Trading hours
FX market: 24hr market, 5.5 days a week
Equity market: Monday through Friday from 8:30 EST to 5:00 EST

Profit potential
FX market: In both, rising and falling markets.
Equity market: Most traders/investor profit just from increasing markets.

Transaction costs
FX market: Commissions are lower and spreads are tighter.
Equity market: High Commissions and transaction fees.

Buying power
FX market: Leverage approximately 500:1.
Equity market: Leverage from 2:1 to 4:1.

Specialization
FX market: most volume (85%) is made on significant currencies (USD, EUR, JPY, GBP, CHF, CAD and AUD).
Equity market: More than 40,000 stocks to pick from.

Forex market vs. Futures market.

Liquidity
FX Market: Near two trillion dollars of daily volume.
Futures market: Around 400 billion dollars daily.

Transaction costs
FX market: Commission free and tight spreads.
Futures market: High commissions charges.

Margin
FX market: Fixed rate of margin on every position.
Futures market: Different levels of margin on overnight positions than day time positions.

Trade execution
FX market: Instantaneous execution.
Futures market: Inconsistent execution.

All this makes the Forex market extremely attractive to traders and investors. However I require to make something clear, although the benefits of trading the Forex market are infamous; it is still tough to make a successful career trading the Forex market. It needs a lot of education, discipline, persistence and commitment, as any other market.

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