Why Forex Trading

The FOREX Market never sleeps. A currency trader may take advantage of all market conditions at any time. There is no waiting for an opening bell. It is a 24-hour, continuous currency exchange that never closes, you can trade whenever you want: morning, noon or night. This is a very big advantage compared to stock trading with limited trading hours.No single entity one can control the marketThe Forex market has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived, at the stock market, trade prices can be manipulted by stockbrokers and market makers.Large Liquidity in the FXWith $2.1 trillion changing hands daily, the FX market is extremely liquid. This means you can instantaneously buy and sell currencies at any offered market price. You can even set the online trading platform to automatically close your position at your desired profit level (limit order), and/or close a trade if a trade is going against you (stop order). Using a trailing stop can be a powerfull tool to maximize your profits.Low transaction costsThere are no brokerage commission fees for each FX transaction, for all the major currency pairs, the spread is around 3-5 pips and is the only cost. High Leverage FOREX investors are permitted to trade foreign currencies on a highly leveraged basis which could be up to 100 times their investment. An investment of US $1,000 controls US $100,000 of any particular currency. A small margin deposit can control a much larger total contract value. Trading potential in both rising and falling markets Trading currency allows traders to trade during rising and falling markets. One can just as easily "short" a particular currency as go "long", because currencies trade in "pairs". Thus, when you buy a particular currency, you are actually simultaneously selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other. Interbank market The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organized exchanges to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets.
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