So Why Forex Trading

Many traders often have a tough time entering into Foreign exchange simply because they still think that trading stocks is better. This is usually because they don’t know very well what Foreign currency trading is. With stock trading you are trading tiny parts of the company that can maximize or minimize in value depending on how much cash the company makes. Each stock can be sold for a nice gain in the short-run as well as the long term. Nearly everybody who get started in stocks want to get in it for more of a long term investment.

With foreign currency trading the full name of the game is short-run. People are not interested about keeping one thing for extended periods. Many foreign exchange trades are often done in just a 24 hour period and the results can be higher then with stocks. In this article I’m going to outline a few of the benefits of forex trading compared to stock exchange trading so you can figure out on your own if this market is good for you.

Broker fees and Fx Trading

With stocks an individual have to give a commission to your broker for the trades you make. According to whom your broker is these fees can be huge and add up very easily. So having a huge number of transactions your commissions can get uncontrolled quite fast. Fx trading gives the advantage in this section since how currency trading is commission free.

With Fx trading your agent isn’t going to take a commission for your trades. They set something called a spread on your investments. This is basically the difference between the asking price of whatever foreign currency you’re investing in and the selling price. This means you will not have to build up large fees.

Differences in time

When you are stock trading you are limited by the time period you can spend on them. The market closes in the afternoon. In case you are trading the forex market the day last 24 hours, the trading will begin way across the other part of the world in markets like Australia at the start of the week and doesn’t end until the end of the working week in places like New York. And so anyone who may not have lots of time on their hands can still get in on this market even if they’re stuck in a full time job.

Limited size of the markets

The biggest difference in Foreign exchange trading vs . stock market trading is the sheer volume of the market itself. If you were to total all of the American stock markets they would only equal roughly about one hundred billion dollars of day to day activity. With currency trading the market deals with anywhere from between 1.5 trillion dollars to 3 trillion dollars each day. The market is globally without restricted to a singleplace in the world. This will allow for the currency to be more liquid which means that there’s alwayssomebody that is ready to buy and somebody wanting to sell whatever currency they want.

This is getting interesting; I am telling you the manybenefits ofcurrency trading as opposed tothe conventionalstock market. In the next part of this article I am going to pick up where I left off and provide you withmore explanations whycurrency trading kicks butt over common stocks.

Learn more about how to trade forex at http://www.definiteforex.com

Disclaimer: The information presented and opinions expressed herein are those of the authors and do not necessarily represent the views of MinimumCase and/or its partners.

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Written by ninataaman

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