The virtues of the forex market Conclues

Reduced transaction costs.

The existence of lower transaction costs makes the forex market is quite attractive for investors. In the stock market, the investor must pay a commission or a spread. In line with the commission, the commissions can be of the order $ 20 per transaction, if an American. Positions of U.S. $ 100,000, the average cost for commissions can be as high as USD $ 120. The structure of Non forex market removes the commissions they charge for bags brokerage, which reduces the cost charged to these customers. Costs were further reduced by the efficiency created by the use of advanced technology platforms that allow investors to negotiate directly with the market maker. Because the market offers immediate liquidity 24 hours a day, investors receive a lower spreads and more competitive throughout the day. Investors in stocks are more vulnerable to liquidity events (not to sell or buy an action because there is no demand or supply) and therefore receive higher spread, especially if it is negotiated outside of market hours. Low transaction costs make the online trading in the forex market is the best option for short-term investors. For an active investor in the stock market that regularly traded 30 times a day, a commission of $ 20 could mean the end of the day cost of USD $ 600. This reduces significantly increases its profits or losses. These commissions are high and must be paid to a group of people that the transaction is carried out in addition to paying the fees they charge their members pockets. In the FX market, being decentralized, there are no such committees.

Custom Leveraging

While many investors know that greater leverage brings greater risk, investors are human beings and very few would reject an opportunity to achieve a profit with the money of another. The FX market is perfect for this type of investment offers the greatest leverage of any existing market. The vast majority of foreign exchange brokerage firms offer 100:1 leverage for regular accounts in the account and 200:1 smaller. Compared with the 2:1 leverage that is offered to the average investor in the stock market in United States, or 10:1 to large investments and you can see because the forex market is the choice for many investors. The deposit required for collateral leverage in forex market is not seen as a down payment to purchase an asset, as is often the case in other markets. He is seen as a repository of performance or to ensure protection against losses incurred. This is useful for short-term investors who need to improve their capital in order to gain quick profits. Leveraging is custom made. This means that the investor has a higher risk aversion can use a 10:1 or 20:1 leverage or do not take any leverage. However, leverage is a double-edged sword. Without proper risk management a high degree of leverage can lead to huge losses.

Wins in a market upward or downward

In the FX market, opportunities abound in both gain market upward or downward. Since currency trading always involves selling one currency and buying another, there is no structural bias in the market. Therefore, if an investor has long position in a currency, he will be automatically short in another. As a result, profits will always exist whether the market is up or down. This is different to the equity markets where investors prefer long positions to short the market at low investors tend to suffer more.