Forex is very popular among investors and for good reason, it has many strengths compared to other financial centers. We detail them in this article.
A very liquid market
Forex is the most liquid market in the world. Every day, several billion dollars are exchanged. This large liquidity makes it possible to enter and leave the market at any time and whatever the amount is traded.
Forex never sleeps
Foreign currency exchange rates are quoted 24/7. The fact that the market is open on a quasi-permanent basis allows investors great flexibility in their trading. They can, in fact, place orders when they wish, morning, evening, night, etc.
The forex lets glimpse significant profits notably thanks to the use of leverage. This tool makes it possible to negotiate with amounts much larger than those available on your trading account. At some forex broker, it can go up to 1: 400 meaning that with $ 1,000 you can invest up to $ 400,000. Be careful, however, to use leverage with caution because it also multiplies losses and can lead to bankruptcy.
Few assets to monitor
While on the stock markets one has to make a choice among hundreds or even thousands of stocks, on the foreign exchange market there are only a few tens of pairs of which five or six majors are those which register the most of them, trades.
Reduced transaction costs
On the forex, transaction fees are based on the spread. This is the difference between the purchase price and the sale price. In concrete terms, a Euro-dollar transaction typically costs less than 0.02%, much less than the cost of a share.