Advantages Of Forex

By: Frank Sousa

You may have heard of FOREX. It's the largest financial market in the world, handling $1.5 trillion every day. The combined American stock exchanges only handle about $100 billion. Every day, people are making money in the FOREX market, buying and selling foreign currencies. But what advantages does FOREX have over the stock market?

Liquidity – As stated above, the FOREX market handles $1.5 trillion worth of transactions every day. That's a huge volume. What this means, is that there are always buyers and sellers for any type of currency. So when you want to buy, there's always a seller, and when you want to sell, there's always a buyer.

No Insider Trading – The constant fluctuations in the value of the various currencies is caused by changes in a nation's economy. In the stock market, some people may get news regarding a corporation before others, causing them to buy or sell, to take advantage of the news before others get it. In FOREX, any news about a nation's economy is available to everyone at the same time, so no one has an inside advantage over anyone else.

Accessiblitiy – The stock market has limited trading hours. It's only open for a few hours a day. FOREX, on the other hand, is open 24 hours a day, 5 days a week. Trading begins on Monday morning in Australia, and continues until Friday afternoon in New York. Trades can be made any time during this period.

Predictiblity – FOREX is more predictible than stocks. Stocks don't always follow trends. FOREX does. FOREX follows well established trends.

Smaller Investment – FOREX doesn't require large investments. A mini account can be set up for just a few hundred dollars. FOREX also allows high leverage, around 100:1 as opposed to 2:1 in the stock market. This means that you can control assets that are worth 100 times your investment.

No Commissions – Unlike stocks, there is no commission for trading FOREX. Brokers earn their money by setting a spread. The difference between the buying and selling prices.

Now that you know some of the advatages that FOREX has over the stock market, isn't it time for you to look a little closer at FOREX investing?

Foreign Exchange
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