Why Forex

forex

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why forex

What is forex

Forex is a commonly used abbreviation for foreign exchange. Forex Trading is typically done through a Broker or Market Maker. The main participants in forex markets are the international banks. As Forex Trader you can choose currency pair that you expect to Change in value and place a trade accordingly.

Why Forex

  • FOREX NEVER SLEEPS
  • GO LONG OR SHORT
  • TRADING WITH LOW COSTS
  • UNMATCHED LIQUIDITY
  • LEVERAGE
  • INTERNATIONAL EXPOSURE
  • HOW DO YOU READ A QUOTE?

FOREX NEVER SLEEPS

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It is to be known that FOREX TRADING is performed round the clock with majority of countries TRADING around the world. Hence clients can trade major currencies any time with markets operating all 24 hours. The vital part in forex markets is that there are is no set or fixed hours in the sense some movements happen almost any time of the day/night.

GO LONG OR SHORT

Unlike many other financial markets, where it can be difficult to sell short, there are no limitations on shorting currencies. If you think a currency will go up, buy it. If you think it will fall, sell it. This means there is no such thing as a „bear market” in forex – you can make (or lose) money any time.

TRADING WITH LOW COSTS

Most FOREX ACCOUNTS trade without a commission and there is no expensive exchange fees or data licenses. The cost of trading is the spread between the buy price and the sell price, which is always displayed on your trading screen.

UNMATCHED LIQUIDITY

Because forex is a $5 trillion a day market, with most trading concentrated in only a few currencies, there are always a lot of people trading. This makes it typically very easy to get in and out of TRADES at any time, even in large sizes.

LEVERAGE

Because of the deep liquidity available in the forex market, you can trade forex with considerable leverage (up to 50:1). This can allow you to take advantage of even the smallest moves in the market. Leverage is a double-edged sword, of course, as it can significantly increase your losses as well as your gains.

INTERNATIONAL EXPOSURE

As the world becomes more and more global, investors hunt for opportunities anywhere they can. If you want to take a broad opinion and invest in another country (or sell it short!), forex is an easy way to gain exposure while avoiding vagaries such as foreign securities laws and financial statements in other languages.

HOW DO YOU READ A QUOTE?

Because you are always comparing one currency to another, forex is quoted in pairs. This may seem confusing at first, but it is actually pretty straightforward. For example, the EUR/USD at 1.4022 shows how much one euro (EUR) is worth in us dollars (USD).