Why Get into Forex Trading instead of Stocks?
There are different reasons why you as an investor should get into forex trading instead of stocks. By engaging in trading forex, you are able to access a market that is bigger in terms of parameters as compared to the stock market.
The market offers more flexibility than the stock market given that it operates every day for 24 hours, you are able to trade and still be able to handle all your other responsibilities. Let’s take a look at some of the reasons why you should definitely pick trading forex over stocks.
Compared to the stock market, you as a potential investor can obtain a far more substantial leverage. When you start getting a loan to make trades, you can potentially enjoy better returns.
If a trader has access to 400:1 margin, they can make a $4,000,000 trade with just $10,000 in margin.
Given this, you are only required to put 0.25% of the trade down as your margin. By getting into this trading, one can gain stronger returns. Of course, it can also go both ways as these forms of leverages can also amplify your potential losses.
24-Hours a day
One of the best things about trading forex is that the markets are open at your disposal, 24 hours a day. Investors will find it very satisfying to know that they can combine this form of trading with a day job or full-time work. This form of trading can be done after work hours. What is also great is that there are intermediaries like broker-dealers, financial institutions and banks in different cities to give support depending on your convenient time for trading. For individual traders, 24-hour access simply means greater options.
With the global forex market being large, it gives you as a trader significant liquidity which gives ease for you to exchange one asset for another. The significant size of the market makes it so you can get in or get out of positions easily. Given maneuverability, the liquidity can provide you with lower transaction costs since some brokers or financial institutions would charge less to set up trades. It becomes easier to handle large increases in trading volume when there is high liquidity in the market without you going through substantial changes in prices. This makes the market less vulnerable to sharp changes in trading volume.
Forex Trading is the World’s Largest Market
The global market trade over US$5 trillion daily,
while the forex market’s daily trading volume exceeds US$5 trillion, the U.S. dollar oversees for nearly 88% of total trading volume, additional BIS figures reveal. This enables greenback’s daily trading volume to more than US$4 trillion. With that being said, you are able to get into trading forex where the market is more than lucrative for any trader. By getting into a market that participates in high volume trading, will mean that it is more difficult for individual traders and institutions to engage in price manipulation, which in effect, have traders experience sharp price fluctuations in short time periods.