Today Forex trading is fashionable, it is a hot topic. Brokers do everything they can to start trading on their platform by paying their spreads. For this reason, I want to give you the correct information. For me, the advantages of Forex on stocks are very clear.
A market open 24 hours a day
Forex is a market that is always open: it starts with Asia, then opens Europe, then the USA and when the USA goes to sleep it opens Asia again. This means that you can trade when it is most convenient for you (there are differences between the markets, but not decisive for your success as a Forex trader). Just open your MT4 trading platform and start trading. As simple as that!
Trading without commissions!
If you have traded, you know that the issue of commissions is important. In the actions and also in the options you always have to deal with this cost. Not in Forex! There are typically no commissions for trading. So how do brokers make money? With the spread, which is the difference between buying and selling currency pairs. But compared to commissions it is a much less impacting element on your profits.
Instant execution of orders
With shares and options – and even more with commodities – you are conditioned by liquidity and possibly also by market volatility in the execution of your buy or sell orders. In some cases you don’t know exactly at what price your order will be made. This does not happen in Forex, at least with the most common currency pairs. Liquidity is always maximum and your order is executed almost instantly. Maybe avoid stormy moments or bizarre currency pairs.
You can make shorts without problems
Do you want to make short – that is, sell even without having the title counting on the fact that the title will drop – with your share account? The broker will give you an X-ray; if you let him do it (it’s even more difficult today). But with Forex, you can buy or sell as you want; it’s the same for the broker. This means maximum versatility to earn when the market goes up and when the market goes down.
The stock or options market is managed by intermediaries. And intermediaries add time and costs to the process: that you pay. In Forex there are no intermediaries; brokers simply connect you to the market. Maximum transparency, minimum waste.
Nobody can control the market
In the stock market; the software of the big players can actually influence prices by buying or selling large quantities. It is one of the reasons for global crashes since computerized systems manage trading. But this does not happen in Forex: it is such a liquid and rich market that practically nobody can influence it even by buying and selling large quantities of currencies.
And analysts who influence the stock market by going to talk on TV or in newspapers about this or that title cannot do it either. Forex trading is impervious to everything, really as close as you can get to the perfect market.
If you invest in stocks or options, you have thousands (at least 8000 stocks on the American market) of different stocks to trade on. If you trade seriously, this means knowing them! If not thousands, at least a few dozen to choose the title on which at that moment it is better to act. And the same goes for the options.
But with Forex you can focus on the 4 fundamental currency pairs (EUR / USD, GBP / USD, GBP / JPN, USD / CHF) or at the limit even on the fundamental one (EUR / USD, Euro / Dollar). You become good at the Euro / Dollar and you can live on Forex!
Imagine: you can know only one “title” instead of tens, hundreds, thousands.
As you can see, there are excellent reasons why Forex trading is so popular today. If you will face it with study, humility and, why not? With Forex, you have big chances to quickly reach your financial freedom. Thank you for reading and good luck in your Forex adventure!