The Benefits of Trading Forex

Filed under: Learn Forex Trading |

For any newbies out there, today I would like to take you through a few of the benefits of trading forex, if that is what you are considering doing.

 

If you have been trading stocks for a while and find the market sometimes suffers from a lack of liquidity (particularly with some of the small cap stocks), then forex might be just the market for you. When I used to trade stocks, there were times when I tried to sell and there simply was no buyer. This does not happen when trading forex.

Unlike the stock market, liquidity is never a problem in the foreign exchange market with over four billion dollars changing hands every day! As a result, the spreads are also tighter, which means you get to keep more of your profits.

 

Another good thing about trading forex is that you can go long or short. Although it is possible to do this with stocks, you have to do it on a spread betting platform, where the spreads are often much wider. In forex, you can also buy as little or as much as you want with no fees. The fees are usually all accounted for in the spread, just like in spread betting, but the spreads are tighter.

 

Finally, if technical analysis is your thing, then forex is the market for you. Levels of support/resistance and moving averages are respected very well in the forex markets, which means that technical analysis is a much more viable way to trade. This is not always the case in the stock market, which is often driven more by company fundamentals and news reports.

 

So in summary, there are many reasons why you might choose to trade the forex market over the stock market. I have listed just a few here, but I’m sure there are many more. Oh, and did I mention… forex is a 24-hour market!

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