The Forex Edge: Why It is Better than Other Financial Market Trades

The Forex market has several edges against other financial trading platforms which when used well could rake in big profits.

Compared to other accessible investments which everyone could take advantage of, Forex – or the foreign exchange market – always comes to mind. It’s accessibility is 24/6, so it definitely has an edge over commodity or regular stock markets.

Another plus point for the forex market is the small amount of capital invested needed to start on your way. The market welcomes everyone who wants to trade, even with a small investment of $1. This is considered to be a ‘micro account’ which gives control over 1,000 units’ equivalence to one contract. The profit or loss is termed ‘pick’ or ‘tick’ that shows the movement of the currency where a dollar’s profit or loss is worth $0.10. On the other hand, a regular account starts with a pip worth $10.00, which gives control over currency units of 100,000.

The name of the game in forex trading is liquidity. Trading through the market gives you control over your investment, which means that the market is open for buying and selling anytime. This is a great position to be in where capital money can be open right away with no waiting periods or payment of an additional commission. Most of other trading options require holding invested money for longer periods of time.

In Forex, a slice of larger market positions can be controlled with a small amount of capital with the use of margin or leverage trading. It is a common practice in the trading to get a leverage of 1:100 that can give control of 100 times larger amounts than the invested money. Offshore companies also offer leverages of 1:500 and 1:1000.

A bearish or bullish market can work to the advantage in forex trading. Stock markets, on the other hand, need rising stock prices to gain and are strictly limited by the laws governing the stock exchange market. Forex trading can gain profits following downtrends and uptrends. While it may be viewed as a risky investment, the key lies in good self-discipline combined with money management skills that could lower the risks involved.

A computer with a good internet connection can get you on your way to the forex market, accessible anytime and anywhere. Before jumping on the bandwagon, however, it would be better to practice first with ‘fake money’ through a demo account that most foreign exchange brokers offer. This is the best way to protect your hard-earned money, too.

Post Reference: Mr Alexander shared his Forex Tricks and Facts in this post, Alexander is a Forex analyst from Egypt Forex trading market. You can find more about Financial Market here.