Forex is actually trading of currency and deals in the goods, services and currency trading. Forex trading has gained lots of popularity with the passage of time and lots of people have started joining the trend. This concept of trading is purely based upon investment whether they are big, or small one.
Forex is also said to be the economic indicator of the economy that helps to ascertain the financial scenario of the nation. Also, Forex market is the largest economical and financial market of the world. Its cash capacity is considered even larger than the treasury and equity market.
The trading of currency is the main work involved in this market and thus, great risk factors are also involved with them. It is also said that it reflects the true economic and financial condition of the country in an exact way. Moreover, currency trading also highlights the factors connected with the country assets.
Compared to Equity Trading, the FOREX offers several benefits like,
1. Around the Clock Market, open for 24 hours.
2. Now that is news which all traders mostly like to hear, no time constraints & having a market with flexible to trade any time day or night. Unfortunately such time zone benefit is not present in the Equity market where one has to do trading in specific business hours.
3. Higher trading volume.
4. Larger transactions need a higher trading volume& this advantage is there with FOREX that offers 110 times more trading than the Equity Market.
5. No transaction or commission fees.
6. Did you know that most of those Forex Sites having nil charges when it comes to Transactions or commissions done by the investors or traders. Same is not with Equity trading; the service brokers have to give a commission fee varying from $5 to $100.
Price stability through superior liquidity:
Dealers or traders are more inclined to do the trading at Forex because it’s higher trading volume & this high liquidity ensures price stability in the foreign currency market. When it comes to Equity Trading, the trading volume is much lower which leads to high risk in the liquidity.
Higher leverage:
Compared to any major stock exchange trade markets, Forex provides higher leverage. If the normal leverage in Forex is 100:1 then in Equity it’s much lower that is 2:1. The Traders can do high volumes of trading in Forex markets because of the higher leverage.
Profit Potential:
In Forex, the investors can do trading even during when the market is down or up. Same is not with equity market where one faces few difficulties due to market polices when the market is down.
Now, Compared to Future Trading, the Traders have advantages in FOREX such as:
1. Round the Clock, market trading
2. Forex is a 24 hours trading market whereas Future market is done on certain timing or defined business hours.
3. Superior liquidity
4. Forex is the biggest liquidity market involving high trading volumes & transactions. Future market offers less or limited liquidity to the Traders leading to less trading.
5. Forex uses simple and easy price quotes
6. Forex calculations are very simple to understand whereas other trading involves complications.
7. Forex trading is commission free
8. No Commission fee is charged in Forex, whereas a service fees is charged in Traders in Future trading.
Forex trading is Faster & Accurate:
Speedy transactions with Quality & accuracy are executed only by doing trading in Forex. But, the traders do not experiment the same in Future trading which is not so rapid & is also uncertain.
No comments:
Post a Comment