Operate the market Forex has some advantages over other market financial, amongthe most important are: liquidity, market 24 hours a day, leverage, low transaction costs, small investment, specialized operation and operations anywhere among others.
1. operation 24 hours a day
The forex market operates effectively 24 hours a day. Whether the 6 o'clock or 6 o'clock, somewhere in the world, there are buyers and sellers who are constantly negotiating currency. The operators of the market FOREX (FX) can always react immediately to the news for the last time; and, unlike the stock market, gains and losses are not affected by earnings reports announced after the close of the market, Conferencecalls with analysts, falls in the level of operations due to "news pending" or ads.
openings and closures forex
2. greater liquidity
With one volume of operations daily 50 times greater than the volume traded on the New York Stock Exchange, always there are brokers and brokers (more forward explain what a broker) willing to buy or sell foreign exchange market forex. The liquidity of the exchange market, especially of the main currency market, helps to ensure price stability. Operators can almost always open or close a position at a fair market price. This represents a great advantage of the Forex market.
Due to the low volume traded, investors in the stock market and other markets listed are more vulnerable to liquidity risk, resulting in a higher spread or sharper price changes, in response to any relatively large operation.
3 leverage of 400:1 in the forex market
Later explain in depth what is leverage, but to give you an idea, a leverage 1:400 means that if you have one has €1,000 actually be speculating as if tubieras €400.000. This means that we can earn money as if have €400,000, but in case of lost, these willsee limited at €1000 invested initially.
Later dedicate a chapter to explain precisely everything related to leverage.
4 minimum risk capital
The forex market requires less capital risk than other markets. Some brokers incluseallow opening accounts with US$ 1 (Yes, read well, only a dollar). On average, the minimum investment is usually US$ 300.
Of course, we can not expect to make a fortune from this capital, but we can definitely serve for us to enter the world market without risking large sums of money.
5. specialized operations
The liquidity of the market allows us to specialize in only some currency. Around 85% of transactions take place in seven major currencies mentioned above. This allows us to follow in detail the news economics which will help us to predict the evolution of the markets.
6. low transaction costs
The foreign exchange market is considered one of the financial markets with loweroperating costs. Most brokers charge based on the following two schemes:
Spread - The brokers charge a different price for purchase and sale operations, thisdifference is which left the broker.
Spreads and commissions – most of the brokers in this scheme charged a Commission, but the spread is usually very small, so that even the transaction costs may be lower than the brokers that charge only spread.
7. equal profit potential of both bullish and bearish markets
In all open forex position, an investor has a long in one currency and short position in another (later you explirare in depth that is to long or short a currency). A short position is one in which the operator sells currency until it depreciate. In this case, theinvestor benefits from a decline in the price of the market.
8 trade from wherever
The fact that transactions do not have a physical location where all occur, allows us to do operations anywhere in the world. We only need an Internet connection wherewe can access the broker
To end this section you put two comparative tables that help understand the advantages of forex over other types of investment.
Advantages of Forex actions
Forex vs. stocks
Forex vs future
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