7 no-brainer reasons why trading Forex is better than trading stocks.
1. Trade twenty-four hours a day!
Except during the weekend, the Forex marketplace is open night and day. Compare that towards the stock market and also the futures market which often opens at 9:30 am and closes at 4 pm EST in North America. Because of the global nature of the Forex market, you can trade anytime you like, night or day.
2. No commissions.
Tired of paying up to $30 per trade for any simple stock transaction? You don’t have to be worried about that when trading around the Forex market. Your broker makes their cash by taking the main difference in price between your ask price and bid price for that currency being traded. This means nothing out of the pocket.
3. Instant order fulfillment.
A common complaint (and the sad fact of life) with regards to trading around the stock or futures marketplace is that there is normally a delay between whenever you place your order so when it gets filled. This can mean the main difference between creating a bundle and making very little.
Because of the incredibly high amount of transactions that occur daily around the Forex market you can fill your orders instantly based on the real-time data using your trading platform. There can be times when the marketplace is particularly volatile which could result in some minor delays, but for that most part, you receive what you see and pay for.
4. No middlemen.
Unlike stock trading, Forex traders can access the marketplace maker directly without needing to go through an intermediary first. This means that an investor can buy or sell from the entity that decides around the price for any given currency pair. Because an additional layer of communication continues to be eliminated, traders take advantage of cheaper costs and gain quicker use of trades.
5. No unfair influence.
We’ve all seen it on T.V. or find out about it around the news – talking heads telling us to purchase when a stock’s prices are plummeting, assuring us that everything is going to be alright ultimately. The truth is that the only person that wins may be the firm issuing that so-called advice as the average investor is left to lick his wounds. The Forex market can’t be influenced by anyone brokerage or person because it is representative of a country’s economic health insurance and not opinion, and it is, therefore, safe from any attempt for influence.
6. No choice overload.
There are over 8000 stock open to trade around the NASDAQ and NYSE alone – that’s a great deal of news to maintain on a daily basis, and a great deal of analysis to do before you begin your next trade. Compare that towards the Forex market which, even though it gives you access to dozens of different currencies, has a tendency to focus on the four major currency pairs. This drastically reduces your quest time and enables you to enter the marketplace far more quickly.
7. Limited risk.
Forex traders must enable margin limits to prevent risk. The trading platform of your liking will automatically issue a margin call when the margin amount essential to your account exceeds the particular capital available in your trading account. What this means is the most you can lose may be the money that is present in your trading account. With stock trading it is possible for any margin call to happen at a loss, causing you to be liable to lose any amount unavailable in your account.