Advantages of Online Forex Trading
There are several markets on which you can trade through online platforms provided by brokers, banks, etc ..
Only the Forex market allows you to always trade online. The Forex market is open 24 hours a day, except weekends. The broker provides the chance to make Forex trading online from 11pm on Sunday till 11pm on Friday, so you can operate at any time of the day: while you are coming back from work, for example, something that is impossible to do on the stock market . In addition, this almost always allows you to avoid to open an in gap position, a very common situation on the stock market.
When you are trading online on the Forex, you will notice there are no taxes on transactions; as opposed to the broker of the stock market, Forex brokers do not ask for commissions at all. So, how do they earn? Through the bid-ask spreads. Depending on the broker, the spread will change, so you must know how to choose the best broker suited to your needs with which to do Forex trading online. There are brokers who offer very tight spreads on majors and others who offer most competitive spreads on exotic currencies.
Another advantage of the Forex market is linked to the liquidity, so high that a fund or any other investor in the market will not be able to really influence the price trend as it could happen on the stock market. Obviously, the trend may be affected by unexpected monetary policy decisions of central banks, rating agencies, or direct intervention of the monetary authorities on the foreign exchange market.
Another interesting aspect in doing online Forex trading is definitely the volatility factor: it is rare to see a currency pair remaining in a given range value for too long; so the investor has the significant profit opportunities by taking advantage of the movement generated on the currencies every day.
The broker also offers a strong multiplier effect: a lever that you can use to increase its earning potential. The leverage usually arrives up to 500 to 1, and for each transaction you can choose the desired leverage, but you should never forget the use of money management techniques for the management of your own capital.
The Forex is also full of free information about the market: unlike the stock market all the data are immediately available through your broker or on specialized websites, it is not necessary to make a subscription to an online newspaper to follow everything happens on the market.
Another advantage is the ability to start online Forex trading with a low initial deposit. Regardless of the amount of the investment, the Forex allows you to speculate on currencies and get an interesting leverage effect. On the stock market, instead, you will need to invest more capital in order to get interesting performances. Of course, the counterpart is represented by a higher level of risk of the trading operations on the Forex.
Category: Forex
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