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If you are looking forward to
earn good returns from your investment, Forex or Foreign Exchange Market is a
great proposition for you. If you are thinking why we are recommending for
Forex trading – the answer is Forex trading is one of the most profitable
investment options. There are so many advantages of trading at the Forex market
that have made Forex trading so much popular all over the World. Even a few
years back Forex trading was not so popular, but gradually it is becoming more
and more popular among investors and there are reasons behind that. Here we
are presenting some of the factors that have made Forex trading a viable
investment solution.
First of all Forex market is the
biggest investment market in the World. If we consider the Global Forex market
as a whole it amounts to trillions of dollars. So you can understand that Forex
market has the biggest potential for every investor. Unlike most of the major
stock exchanges that are saturated with investors, Forex markets have still got
immense potential and you can benefit from this largest financial market that
has a global dimension. That is the reason that Forex trading is being
considered as more preferred way of investment than the stock market.
In Forex trading you can have the
greatest leverage if compared to any other form of investment. With minimum
margin deposit you can invest in much bigger amount and hence you have the
chance of earning more with little investment. In fact there are some Forex
brokers who will offer you a leverage of 200 to 1. That means with a minimum
investment of $100 you can trade in $20000 worth of currency at the Forex
market. This is one of the determining factors for the rising popularity of
Forex trading.
In Forex trading you will enjoy
the highest liquidity of your investment. Liquidity is the feature that is
determined by the possibility of transforming your assets into cash without any
price discounts. While doing Forex trading you will enjoy highest form of
liquidity simply because you are dealing in currencies and there will be no
price discounts when you are converting your investment into cash.
Another advantage of Forex
trading is that Forex market is open round the clock, if you consider the
Global Forex market. So if you are investing in the Global Forex market you can
actually trade at any time of the day according to your convenience and
throughout the week.
If you compare the stability of
the Forex market with any other market like the stock market and the commodity
market you will find out that Forex market is the most stable of them. In fact
while the stock market can rise or fall about 15% in a single day, Forex market
does not fluctuate more than 1% in a day. So, with such stability in the Forex
market you can save your investment even if the market is falling and hence
there is less risk involved in Forex trading.
In Forex trade you get the least
spread rate. In fact during the last few years the spread rate or the
difference between the bid price and the ask price has tightened heavily.
Generally the spread rate for the most highly traded currency pair or Euro and
US$ is just about 5 pips.
Forex trading has got least
transaction cost. As an investor you will have to pay nothing or very little
for the trading to your brokers. This is one advantage that will not only give
you more return but also let you enjoy more flexible trading terms as you do
not have to pay the transaction charges to your broker.
There is a misconception about
Forex trading that is you need a huge fund to start trading at the Forex
market. The reality is most brokers offer a mini or micro account for the
starters that require very little investment to start of Forex trading.
With the wide available Forex
trading systems or Robots, trading at the Forex market have become lot easier.
You can now see the current quotes, have a look at your fund and trade
effortlessly with these automated systems.