Instead of shares, futures and options, more and more people and investors are trading Forex. It is clear that Forex has given traders and investors unparalleled advantages over other investment vehicles. It is because of these benefits, I personally believe that a lot of not-so-well-to-do people can benefit from this market. In this article, we will look in detail the advantages of Forex trading has for wealth builders.
24 Hour Trading
The Forex market is open 24 hours daily. When Asia market is closed, the European market starts followed by the USA market and continued by Asia market again the next day. Thus, this allows Forex traders to take positions regardless of the time and locations. This is really helpful for those who can't afford to quit their job and they can earn additional income through Forex part time.
No one can corner the Market
Foreign exchange market is so huge that no single entity has the capability to control the market price for a long period of time. That includes a central bank. There are simply too many participants, ranging from personal traders, commercial banks, central banks and hedge funds.
Extremely Liquidity
As the same reason as above, because Fx market is so vast, it is extremely liquid. Under normal circumstance, you can buy or sell the currencies pair at once. Shares on the other hand, you might not able to buy or sell the shares you want as there might not be a seller or buyer. There no such thing in Forex.
No Commission
There is no commission and no middlemen which incurred high cost and eat into your profits. Brokers earn their money through pip spread. At the reputable and larger brokers, the pip spread can go lower than 0.1 percent per trade.
Flexibility in Lot Size
In spot FX, you determine your own lot or contract size. This allows a lot of people to trade with as little as $300. Personally, I feel this can help a lot of people who wish to improve their life but does not have a lot of spare cash. Stock market and futures require a lot of capital to invest, thus making the wealthy or high salary society to earn more. Middle income group will have problems entering the stock market due to lack of cash. It isn't wise for middle income earners to take a loan for this risk. Therefore, FX brokers that allow any lot size helps middle income earners to earn extra money. As long as these people has good and proper education on currency trading.
High Leverage
This is important to anyone who wish to trade as a small amount of capital with a high leverage allows you to control a larger contract size. This gives you the ability to make bigger profits and keeping risk at bay.
For example, with leverage of 100:1, if you open an account with $100. you are able to control $10,000 contract size. At the same time, by opening an account with $1000, you can control $100,000!
This, of course, can also cause you to lose the amount of money in your account easily if you do not exercise good money management.
Demo account
To me, this is by far the most important of all the advantages. A chance to test out, to try out and to learn any strategies you come across. For free!
By using these demo accounts, not only you can familiarize with the broker platform, you also can practice what you learn using virtual money. Once you gain experience and confidence, you can start open an account and earn money.
With these advantages, it is no wonder why many people are considering and trading profiting from Forex. Although there are some advantages in other markets, for example some company's shares gives dividends. Even so, Forex has more advantages than stocks and futures when it comes to trading.
Goh Huang Yong begin learning investment from his father since 1985. His dad also taught him the difference between investing and trading, and he has been trading stocks until one day he came across a website that introduce him Forex at year 2003.
Huang Yong first started with a forex demo account and traded for the first month and made more than 100% from that virtual money. Brimming with assurance, he started trading with only USD$300.
One month later, he profited USD$1,823.78 using that USD$300 account. However he made a lot of mistakes and this account went empty afterwards. From then on, he told himself to trade with eyes and hearts open. Since then, he has been making about USD$9000 monthly.
His brilliant success with Forex caught eyes from a Malaysian Forex School and was invited by to coach there. While he coaching in Malaysia, he trained a student to be a Forex Coach successfully as well.
To Learn more about Forex, got to http://www.whizforex.com
Article Source: http://EzineArticles.com/?expert=Goh_Huang_Yong
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