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Forex Trading Guide – Advantages of Trading Forex

Forex or Foreign Exchange trading has a number of advantages over stock market (share) trading, and this is why more and more people are learning about the Foreign Exchange Market and trading Forex for profit. Greater flexibility in trading and operating are just some of the key benefits available.

1. There are no broker commissions as such. Forex dealers earn their income from the “spread” (the difference) between the buying and selling prices. This is usually a fraction of one percent of the relevant trade.

2. The Forex market is open twenty-four hours, five days per week. Unlike share trading you can trade any time you want. The Forex market is open continuously from 0:00 AM GMT Monday to 10:00 PM GMT (5:00 PM EST) Friday.

3. It is difficult for individuals or even companies to artificially influence the Forex market. This is because the sheer volume of daily trading is so large. (However, some corrupt individuals can influence the value of shares. An example would be sending out millions of emails, stating that shares in a particular company are about to increase sharply and encouraging recipients to buy them.)

4. You can trade the Forex using borrowed capital. This is called Margin Trading. Margin trading is where you use between 0.5 and 4 percent of your own money to control a much larger amount of borrowed money. This enables you to leverage your investment. The Forex is traded in lots, a standard lot is $100,000, Some dealers allow you to trade in smaller lots, called Mini- and Micro- lots.

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