5 Reasons to trade with Forex

 

An alternative to investing in the stock market is trading in the currency market or Forex. We know that the Forex market is the largest and most liquid market in the world, it is defined as the number of daily transactions made in total exceed 4 trillion dollars (4,000,000 million). The Forex market is an international market, so investors can make trading on it at any time of day. It may not be the ideal market for everyone, but it does represent a viable alternative to investing in equities.

1. OportunitiesMake trading in the Forex market is possible 24 hours a day, 5 days a week; however, if we compare this with the American equity market, for example with the NYE, we can only operate for 8 hours a day, 5 days a week.Although access times are higher in the foreign exchange market, we must bear in mind that the real competitive advantage of Forex is able to operate with the majors crosses during the overlap, ie, when there is greater volatility. In the next picture we see the moments of volatility in the Forex market, which is when two overlapping open markets:
   
2. SimplicityThe eight major currency pairs (EUR / USD, USD / JPY, GBP / USD, AUD / USD, USD / CAD, USD / CHF, EUR / JPY and EUR / GBP) are responsible for most of the market volume . This allows to make trading currencies, the investor focus on the fundamentals of each asset, rather than having to choose you walk the more than 2,000 stocks listed on the NYSE, for example.

   8 majors pairs account for 72% of the volume of transactions in the Forex market.

3. LiquidityA higher volume of transactions in the market, the movement of money, which can help achieve a more efficient market.
4. Forex Market GrowthWhile the Forex market has been running daily trading volume over the past 15 years, the stock market has lowered its volume and returns to 2001 levels.

   Growing in opposite directions.

5. Profit Potencial
   Leverage can make small trades in the currency market in large profits (or in the same way be large losses).

    Leverage is your friend, or is your enemy?

   Compare an investment of $ 2,500 in two different assets: shares of car maker Tesla Motors, Inc., and at the junction AUD / USD using a leverage of 20: 1. In the first 7 days of 2013, Tesla increased dramatically by 234%. Instead, the AUD / USD only 11%, even though much lower leverage allowed the performance was almost the same.
   Although past performance results are not indicative of future results, we must stop and think this: How often does a stock moves from unamanera as significant as Tesla? Not very often.
   The rules of the game allow the Forex trader have more profit opportunities but also huge losses, even when market movements are not extreme.