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Advantages of forex trading
Written by: PaxForex analytics dept - Friday, 27 June 2014 0 comments
Forex is the largest financial market in the world available for everyone who wants to step inside, start trading and earning. Currency trading is a sophisticated form of investing where you can earn a huge amount of money in a short period of time. Trading goes on all around the world during different countries' business hours where you can trade major currencies at any time 24 hours per day 5 days a week.
Advantages of the forex market are easy access, high liquidity, trading with leverage, low transaction cost and 24 hours trading. The amount of capital is very low and it allows numerous types of people to easily enter the foreign exchange market. Around 5 trillion dollars are exchanged every day according to the latest figures released by the Bank of International Settlements (BIS) which allows very high level of liquidity.
In Forex trading with a small deposit you can control a much larger total contract value. Leverage gives the trader the ability to make nice profits while at the same time keeping the risk
capital to a minimum. For example if you trade with 1:100 leverage it means that a 100 USD margin deposit would enable a trader to buy or sell 10,000 USD worth of currencies.
There are no clearing fees, no exchange fees, no government fees and no brokerage fees. The cost of trading is the spread between the buy price and the sell price which is always displayed on your trading screen. Spreads in the forex market also tend to be much less (or tighter) than the spreads applied to other securities such as stocks. Transaction cost (the bid/ask spread) is typically less than 0.1% under normal market conditions.
There is no waiting for the opening bell in forex trading from Monday morning opening in Australia to the afternoon close in New York which means that the forex market never sleeps. It doesn’t require a full-time engagement and you can choose the trading hours that suit you the best. Also you can operate from any corner of the world, as long as you have an Internet connection.