The foreign exchange market or Forex has the incontestable advantages thanks to those everyone regardless of location, education and income, has the opportunity to trade. All you need is a computer and an internet access. Forex is the biggest market that develops dynamically due to some fundamental advantages over other financial markets. These advantages include the high liquidity, operating time 24 hours Monday to Friday, low cost deals, margin trading and many others.
Now we are going to describe in detail each of them.
High liquidity
The Forex market volume of trade is about $1.5 trln per day that is 50 times more than the one of the New York Stock Exchange. The high liquidity allows traders to make a deal of a different volume for the same market quote. Moreover, the big volume of trade does not permit the major traders to make the market to be in their own interests. The high liquidity means that Forex is always attended by the great number of traders and buyers, and there is no difficulties to open or to close position. Trader has an opportunity to get the quote with the minimum spread. The market liquidity provides the rate flow even at the time of economic crisis.
Round-the-clock operating
Forex market works 24 hours Monday to Friday that allows the traders all over the world to have a deal at any time.
Unlike other financial markets, the Forex market participants do not have to wait till they can respond to the particular event. Forex gives the opportunity to its traders to take a decision and act right after the important news comes up. The traders of other markets who are provided with the same information and the same solution, have to wait till the stock opens.
No limitations
Forex as distinct from the stock markets is independent, i.e. the prices are formed in accordance with demand and the supply. Usually that causes the strong trends that may provide the great profit.
Unlike on the stock, where the trade can be stopped upon the occurrence of certain conditions, trading on Forex never stops, because it does not have any regulators. Forex works every day except for the weekends and international holidays. There are also no limits to currency rate movements.
Margin trading
Forex has a margin trade scheme that enables the traders to make deals, which value significantly exceeding their startup capitals. The successive deal brings a great profit.
Furthermore, the trade is conducted without real currency delivery to their buyers that reduces the additional expenses and lets to open long or short position.
High dynamics
The foreign exchange market supposes to get the quick profits. The trader can earn in several hours from the position opening position or even in few minutes. The fast speed of the currency rate movement means that the risk on Forex is much higher than on other financial markets. However, the availability of short-term deals attracts a lot of people, who ensure the high liquidity. That state of affairs reduces the trader's risks.
Wide choice of trading instruments
Forex offers a great choice of trading instruments. Every trader can choose the one that suits his personal purposes and preferences.
Thousands of shares on stock markets are traded only by specialized funds and organizations, which have their own traders in each state. These traders purposefully trace the certain set of shares.
