Forex market has become famous in these last years. Why is it so that the traders think Forex market prior than all others? Let’s examine why it is so and let’s also compare Forex with the other stock markets.
Some of the advantages of trading the Forex market are:
Admirable convertibility:
Rapid convertibility is a feature of Forex market that makes it admirable from all others. About 2 million of trade is done in Forex Market regularly. This guarantees the price static nature and good trade run. It permits traders to open and close transactions easily. And such huge volume makes it difficult to examine the market in wide aspect.
24hr Trading:
One greatest benefit of trading with Forex is its 24 hrs trading. It is like click and play market which opens on Sunday at 3:00 pm Eastern when New Zealand starts its day and closes with San Francisco at 5:00 pm eastern. There are transactions in all time zones globally that permits present traders to select which time they want to trade.
Beneficial Trade:
Buying power is huge in Forex trade market. Some have the advantage up to 400:1 which allows traders to have only 0.25% in margin of the total contribution. Suppose a trader who uses 100:1 means that to have a US $100,000 position and only US $1000 are required on margin to be able to open that position.
Minimum Transaction Cost:
Brokers usually propose commission free trade. The only amount traders get in any transaction is the spread that is the difference between the purchasing and selling price of each currency pair. This spread is as minimum as 1 pip that is the least addition in any currency pair in some pairs.
Lowest Contribution:
A small amount of assert is needed to start the trading. The first contribution can be going as minimum as $300 USD and it depends on benefits proposed by the broker. It is a great benefit for the forex traders because by this they are capable to keep their chancy contribution to the lowest level.
Particular Trade:
The convertibility of the market helps us to keen on just a few tools or dual pair as main contribution is done in the main 7 major currencies. Allowing us to examine and at the end comes to know about each tool in better way.
Remote Trade:
Trading with Forex just need a computer system and an internet connection.
Now some of the aspects which differ from the other trade markets are as below:
Forex Market VS Equity Markets
Convertibility
FX market: daily trade of almost two trillion dollars
Equity Market: Around only 200 billion daily.
Trading Hours
FX market: 24 hr market and 5 days a week
Equity Market: Monday through Friday with selective hrs time span
Profitability:
FX market: Rise and falls are there
Equity market: only from huge markets
Transaction Cost:
FX market: charge free and firm spreads
Equity Market: high commission and trade charges
Purchase power:
FX market: benefit more than 400:1
Equity market: Benefit from 2:1 to 4:1
Particulars:
FX market: most of the trades are done in
Buying power
FX market: Leverage up to 400:1.
Equity market: Leverage from 2:1 to 4:1.
Specialization
FX market: most of the trade is done on major currencies (USD, EUR, JPY, GBP, CHF, CAD and AUD.)
Equity market: upto 40,000 stock to select from.
FOREX MARKET VS FUTURES MARKET:
Convertibilty:
FX market 2 trillion dollars daily exchange
Futures market: 400 billion daily exchange
Transaction Cost:
FX market: charge free and firm spreads
Futures market: high commission charges
Forex market vs. Futures market
Allownace:
FX market: rates are set on each allowance
Future market: allowance differs at day and night
Trade run:
FX market: rapid run
Futures market: slow run
So we saw comparison of forex market with other markets and we came to a result that it is really adorable. Though there are a lot of benefits of forex trade but still it may be difficult to earn profit for new comers. It need a lot mannered, slow and assurance and bearing unlike other markets.
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Posted by Batool in Forex trading · 0 Comment
