Advantages of the Forex market
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Forex trading has become very attractive because it offers an unprecedented freedom opportunity. A trader (from here called trader) can live anywhere, as long as he can access the internet. A trader can trade at home, at work, and even while traveling. A trader can choose his own working hours because the forex trading market is open 24 hours. A trader will not have a headache like when opening a business because there will be no warehouses, no shipping, no bills, no employees and no travel. And finally, because forex trading creates huge money opportunities, a trader can choose to work independently for himself.
The forex market has many advantages that make it superior when compared to other financial markets (like the stock market). Here are some reasons why more and more people are interested in this market:
Super liquidity
With a daily transaction volume 200 times larger than the New York Stock Exchange, the demand for buying and selling currencies in the forex market is unrestricted. Liquidity of the market, especially for major currencies, makes transactions almost always immediately executed. Therefore, the trader is always traded with the best exchange rate possible.
Market continuity
The main advantage of the forex market compared to the stock market and other trading markets is that the forex market operates 24 hours a day and is closed only every weekend. At any time, somewhere in the world will always have buyers and sellers in the market, so your transaction is always met. You can also respond immediately to market news even when it's midnight at the place where you live. The forex market takes place continuously 24 hours from Monday morning in Sydney until Friday afternoon in New York. That's why forex is also known as a market in which the sun never sets.
High leverage
In the forex market, brokers can lend you up to 99% (or even larger) of the money needed to make a transaction and you only need 1% remaining. If you want to trade $ 1,000, you only need $ 10. It opens up opportunities for market entry for those with small capital but still able to bring big profits. However, financial leverage is like a double-edged sword, if you do not know how to manage risk properly, high leverage can also lead to big losses (we will discuss this later).
Can short sell before buying
The stock market only allows investors to sell a stock when he owns it by buying it before. But in the forex market, he can freely choose between buying or selling a currency even if he does not own it. Because in the forex market, when you sell a currency, it is simply that you buy another currency, with the exchange rate between it and the currency you want to sell.
Have a chance to make a profit both when the price is up and the price drops
Unlike the stock market, the forex market has no limited conditions to sell. The chance to make a profit appears whether it is the buyer or the seller, the market price is up or the price is down. Since currency trading is always buying a currency and selling another currency, this market is not biased. That means you always have the opportunity in every market trend.
No one can manipulate the market.
The forex market is so big and there are so many components that no organization, even central banks, can control the market price for a long time. The impact of some leading central banks, if any, can only cause effects in a very short period of time. And therefore, more and more central banks tend to have less market intervention.
Everyone can access the same market information.
Professional professionals and investors on the stock market have a clear competitive advantage as they are the first to access business information such as forecasting profits, debts, and announcements. newspapers ... before it was released to the public and caused an effect on stock prices. On the contrary, in the forex market, news about economies, which are factors that affect the exchange rate of currencies, are always public and informed on many different media. Anyone can easily access this information as soon as it is published as a basis for analyzing and making investment decisions.
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