The cool sides of doing forex trading

Once you decided to enter into forex (foreign exchange) trading, there are cool advantages:

1. "The market is open 24/7"

Try to imagine you go to a real market, but you need to do so before 8pm because it will close then. This is not the case with forex; since the market is worldwide, trading goes on continuously. Somewhere around the world, a financial center is open for business, and banks and other institutions exchange currencies, every hour of the day and night with generally only minor gaps on the weekend. . Usually, markets open in Australia on Sunday evening, and ends after New York hits the Friday evening clock, in between it passes the time zones in Sydney, Tokyo, Hong Kong, Singapore, Moscow, Frankfurt-on-Main, London. Essentially foreign exchange markets follow the sun around the world, giving traders the flexibility of determining their trading day.


(photo courtesy: gainscope.com)


2. "Keep it flowing!"

With flowing, we are referring to high liquidity which is the ability of an asset to be converted into cash quickly and without any price discount. Without sounding too bookish, we mean to say that in forex you can move large amounts of money into and out of foreign currency without minimal price movement.


3. "It doesn't cost the world!"

In forex trading, usually when you buy and sell the cost for a transaction is built into the price, which is called the spread. You can imagine the spread like a box you ordered and the transportation costs are already included in the whole price. That's it.


4. "Play high!"

Actually, you can use $1,000 capital to control a trade of $50,000 worth. That is what is called leverage. Leverage is the ability to trade more money on the market than what is actually in the trader's account. If you were to trade 50:1 leverage, you could trade $50 on the market for every $1 that was in your account.


5. "I am an opportunity seeker!... lets go short and long!"

Sometimes, it takes a good deal to see an opportunity rising, for instance, you think a currency pair is going to increase in value, you could buy it before it does (buying = to go long). But if you think it will decrease in value, you could simply go short and sell it. There is always a profit potential from rising and falling prices.

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