Unlike equity markets, forex is open 5 days a week without interruption. Private investors who do not necessarily have the time to trade during the day can therefore trade in real time on the foreign exchange market when they want and not at fixed times.
Forex is the most liquid financial market in the world
The huge volume of currencies traded every day in the world (over $ 4 trillion) allows instant execution of orders at real-time prices and guarantees price stability. The high liquidity of the foreign exchange market makes it possible to quickly convert purchases or sales transactions without causing great price variations. The slippage (shift between the price of the order and the price actually executed) is greatly reduced. By comparison reading the Go4rex review, the stock market is subject to price manipulation, wider spreads and risks of greater price fluctuations due to the lower volume traded each day. Even central banks cannot sustainably influence currency rates!
The economic indicators of the forex are easy to follow and understand
Forex exchange rate fluctuations are influenced by macroeconomic indicators. There is no offense to initiate on the forex, because indicators such as central bank interest rates, unemployment rate, inflation rate, gross domestic product or tax policy are known to all traders in advance. Therefore, unlike the stock market which is influenced by micro-economic data, there are very few indicators to monitor, so it is easier to follow the currency market news.
Transaction costs are very low
One of the advantages of Forex and currency trading is that brokers do not charge a transaction fee. They are paid by the difference between the purchase price and the selling price (the spread). Compared with stock trading at an online broker, the cost of a Forex transaction is ten times smaller and there is no custody fee or minimum transaction volume imposed. Regardless of the size of the transaction, trading costs and conditions are often the same.
Average currency fluctuation is less than 1%. The lever offered by the brokers (between 100: 1 and 500: 1) and therefore necessary for currency trading. It allows to considerably increasing the possibilities of gains but also of losses. With such leverage, even small market fluctuations will have a strong impact on trading capital. Margin trading requires a rigorous risk management discipline and the systematic use of limit and stop loss orders. Go4rex portal can help you to avoid such risks.
Trader the market in a downtrend or bullish
By carrying out a transaction in the currency market, you buy the base currency and you sell the counterparty currency at the same time. Investors can therefore trade the market down or up (short or long). The possibilities of gains are therefore possible whatever the trend.
Gains or losses are calculated based on the total amount of your position at the time you close it. Thus, with CFDs it is possible to realize significant profits from a low investment. However, leveraged trading also amplifies losses, so the risk of capital loss may be greater than the amount invested. That’s why it’s important to always consider the total value of your position before investing.