Forex Investment Benefits

What are the advantages of FOREX investments?

§ We trade on the largest and most liquid market in the world.

Due to its size and diversity FOREX depends on political or economic circumstances of any particular country in a much less degree than other markets. The market on which the only asset is money has highest of all possible liquidities.

Foreign exchange trading volume is 50 times larger than the New York Stock Exchange. There are always buyers and sellers abound in currency market. Extremely high liquidity helps ensure price stability. We can always open or close any position at a fair market price any time we consider necessary.

§ Global nature of FOREX market allows traders to trade money 24 hours a day.

In a sense, foreign exchange market follows the sun around the globe. That gives FOREX money manager continuous market opportunities. There’s a chance of rapid price gapping against you, especially if there have been news while the markets are closed.

§ High leverage allows FOREX money manager to earn higher profits on lower initial investments.

Leverage is the ability for an investor to use various financial instruments (such as margin accounts) to increase the potential return on an investment. The maximum leverage for stocks is typically 2:1. FOREX trading allows you to use much larger ratios of leverage (up to 500:1 vs typical 2:1 for equities trading and 15:1 for futures trading) with your investments.

§ We have a freedom to trade in all market conditions: bear, bull or sideways.

We can short-sell a currency anytime we consider necessary. We don’t have to abide by uptick rule to wait for the price to go higher before we can sell, which results in a more efficient and instant order execution.

FOREX actually provides more freedom of action for speculative trading and gives much more flexibility. For instance, in case of CFDs we can hold short positions for only one month under the terms established by SEC. To hold the position beyond the month the fee will be incurred. Whereas for FOREX the short positions can be hold as long as margin requirements allow.

§ No third parties and middlemen –> lower costs for investors.

Because foreign exchange is decentralized, there’s no third party between trader and the market-maker responsible for the pricing on a particular currency pair. FOREX money manager doesn’t have to pay additional hidden fees and commissions.