ADVANTAGES OF FOREX OVER OTHER INVSTMENT ASSETS

5.  Advantages of Forex Over Other Investment Assets

1.  Simple to comprehend and master - In a Forex trade we deal with just a pair of currencies

2.  Low Minimum Investment - The Forex market requires less capital to start trading than most other markets. The initial investment could go very low, depending on the leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level. Online Forex brokers offer "mini" and

"micro" trading accounts with low minimum account deposit.

We're not saying you should open an account with the bare minimum, but it does make

Forex trading much more accessible to the average individual who doesn't have a lot of start-up trading capital.

3.  24 Hour Market - Since the Forex market is worldwide, trading is continuous as long as there is a market open somewhere in the world. Trading starts when the markets open in Australia on Sunday evening, and ends after markets close in New York on Friday.

4.  High Liquidity - Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In Forex this means we can move large amounts of money into and out of foreign currency with minimal price movement. 

5.  Low Transaction Cost - In Forex, typically the cost of a transaction is built into the price. It is called the spread. The spread is the difference between the buying and selling price.

6.  Leverage - Forex Brokers allow traders to trade the market using leverage. Leverage is the ability to trade more money on the market than what is actually in the trader's account. If you were to trade at 50:1 leverage, you could trade $50 on the market for every $1 that was in your account. This means you could control a trade of $50,000 using only $1000 of capital.

7.  Profit Potential from Rising and Falling Prices - The Forex market has no restrictions for directional trading. This means, if you think a currency pair is going to increase in value; you can buy it, or go long. Similarly, if you think it could decrease in value you can sell it, or go short..

8.  No one can corner the market - The foreign exchange market is so huge and has so many participants that no single entity can control the market price for an extended period of time.

9.  Forex is the largest financial market in the world - The Forex market has a daily volume of over $4 trillion. Such a huge amount of a daily volume allows for an excellent price stability in most market conditions. This means you likely will never have to worry about slippage as you would when trading stocks or commodities. The price you see quoted on your trading screen is the price you get.  

TO BE CONTINUE..