Thursday 26 March 2015

Essential Features That Make Forex Trading Unique


Foreign Exchange or Forex is a unique way of trading and this business has some special characteristics that make it stand away from tradition trading means. With an ever growing economy worldwide, more and more developed and developing countries are participating in foreign exchange trading.
Trading or exchanging has been a part of economy since ancient times. From the medieval barter system to the most advanced foreign exchange or forex trading methods, trading has been playing a major role in our economic frameworks.
Forex trading has some unique properties that make it a more lucrative investment sector for both financial institutions and individuals across the globe. Developing economies play a major part of forex trading, while the first world countries are the major stakeholders.
The unique properties of forex trading are classified as:
Forex is 24/7 market
The foreign exchange market is active with trade going on 24x7 and 365 days. Since the forex market is spread worldwide, trading is continuous as long as there is a market open somewhere in the world.The forex markets are considered great for trading because they are open almost all of the time and there are a wide range of currencies to choose from.
Liquidity is very high
In economic terms, liquidity is generally described as the ability of an asset to be converted into cash quickly and that too without any price discount or value depreciation. In forex this means investors can move large amounts of money into and out of foreign currency with minimal price movement.
Transaction cost-effcetive
In traditional markets, transaction costs vary greatly and this cost often gets affected by a variety of conditions like differences in economies or depreciation values etc. But, in forex, typically the cost for a transaction is already included into the price. In the language of forex trading, it is called the spread. The spread is the difference between the buying and selling price. As transaction costs are low, forex automatically becomes the top choice for investors.
Leverage Benefits From Brokers
Leverage is a very unique feature of the foreign exchange market as it allows investors to trade in excess amount that is beyond their account limit. This feature can be best utilized if offered by an expert broker forex . Forex Brokers allow traders to trade the market using leverage giving them the ability to trade more money on the market than what is actually in the trader's account. For example,if you were to trade at 50:1 leverage, you could trade $50 on the market for every $1 that was in your account. This means you could control a trade of $50,000 using only $1000 of capital.
Price differences makes for profit potential:
The forex market is very flexible and has no restrictions for directional trading. For example,if you think a currency pair is going to increase in value; you can buy it, or go long. Similarly, if you think it could decrease in value you can sell it, or go for short term.

CONCLUSION:
With these comprehensive features, the forex is recognized as a flexible and more appealing market that often ensures high profits in trading. Premium futures brokerage companies like P.T. MonexInvestindo Futures, established in 2000 in Indonesia being a top brand offers a host of forex applications and solutions. They also provide financial services that cover Forex, stock indices, commodities and CFDs.

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