If you’re planning to invest, you have to choose a market to
trade in. And most of the time, people will tell you two kinds of markets: the
stock and forex market. These two are the most popular markets among traders.
Now, when trying to pick the best, you have to know the
specific benefits you can get from each. Both of them can be very rewarding and
profitable. A lot have become rich in the stock market. The forex market,
meanwhile, has also made a lot of investors well off.
This article tells you why you should choose the forex market
over the stock market. Basically we’ll tell you the advantages you can take
from it. Add this to diversify your portfolio now! Let’s dig into the reasons.
Forex Market Advantage 1: 24-Hour Market
Unlike the stock market, the forex market is a seamless
24-hour market. A huge slice of the total number of brokers is open from Sunday
at 4 PM Eastern Standard Time (EST) until Friday at 4 PM EST. Meanwhile, the customer
service is also available 24 hours, all days of the week.
This means that you can customize your own trading schedule because
of the ability to trade during the Asian, US, and European market hours.
Forex Market Advantage 2: Low to No
Commissions
A multitude of forex brokers charge no commissions or any
other transaction fees to trade currencies either online or over the phone.
When compared to any other markets’ commissions, fees, and
charges, the forex market has the lowest expenses. This, along with tight,
consistent, and fully transparent spread, makes the forex market an easy pick
for those who don’t have much to spare for expenses and fees.
The brokers, meanwhile, get their compensation for their
services through the bid-ask spread.
Forex Market Advantage 3: Quick Execution of Market Orders
Your trade can be speedily executed during normal market
conditions, under which the price shown when you execute your market order is
exactly the price you get. In other words, you’re able to execute directly off the
real-time streaming prices.
Remember that many brokers in the forex market only
guarantee stop, limit, and entry orders under normal market conditions. That means
that if huge events, like catastrophic ones, are taking place, the term “normal
market conditions” may not apply.
Forex Market Advantage 4: You can freely
Short Sell
In the equity market, there are some restrictions on short selling. It’s quite the opposite for the currency markets. You can free go
short on a currency.
When going short, you are basically betting that an asset is
going to decrease in value. When you trade currencies, you are practically
going long on one currency while goings shot on another at the same time.
This means that in the currency market, trading opportunities
exist regardless of whether the trade goes long or short. This also means that you
all the time have equal access to trade in a rising or falling market. You can
ride out a stormy market with some gains.
Conclusion
Remember that the forex market, for all these advantages we
have been telling you, still has its own shortcomings. There are still some
risks in trading on the forex market. So it is also advisable to check out the
benefits of other markets like stock, commodities, real estate, futures,options, CFDs and many other markets.
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