Trans4mind Home Page
Home Article Library Finance & Business

Why Trade Forex - All You Need to Know

Firstly, there is a great need to know that when traders choose the best market to trade, they are looking for optimal trading conditions as well as the best chance of making a profit. There are a lot of significant reasons why millions of traders across the world chose Speedup Forex for trading. It is fascinating to know forex trading allows you to get a lot of significant perks such as:

Ability to go long or go short

You are allowed to go short on other markets by using derivative products like CFDs, short selling is considered an inherent part of trading forex. The reason is that you are always selling one currency for buying another. Keep in consideration that the price of a forex pair is how much one unit of the base currency and it is worth in the quote currency.

Forex market hours

It is fascinating to know that the foreign exchange market is open 24 hours a day as well as five days a week. Along with this, forex can also be traded from 9 pm Sunday to 10 pm Friday (GMT). These long hours are due to the forex transactions that are completed between parties directly, rather than through a central exchange. Forex is considered as a truly global market that means can always take advantage of various active session's forex trading hours.

It is crucial to remember that the forex market's opening hours vary in March, April, October, and November because the countries shift to daylight savings on different days.

Forex Trade on weekends?

There is a great need to know that the forex market closes on Friday at 10 pm (UK time) as well as does not open again until 9 pm (UK time) on Sunday evening. As the market is only closed to retail traders, it means that forex trading does take place over the weekend and there can be a difference in price between Friday close and Sunday open.

However, traders must need to be highly aware of the weekend forex trading hours. They have to alter their positions accordingly. If you do not want to expose the position to the risk of gapping, you must want to consider closing your position on Friday evening.

Forex volatility

There is a great need to know that the high volume of currency trades each day translates to billions of dollars every minute. It makes the price movements of some currencies volatile. In this way, you can potentially reap large profits by speculating on price movements However, volatility is considered a double-edged sword. It means that the market can quickly turn against you. in order to overcome this issue, it is essential to limit your exposure with risk-management tools.

Why Trade Forex Instead of Stocks?

The overall decision about whether to trade forex or stocks on leverage must be based on which asset you are interested in trading as well as currencies or shares. In order to overcome this confusion, here are some of the significant reasons why some traders prefer to trade forex rather than stocks:

Market opening hours

There is a great need to know that the market hours of the stock market are limited to an exchange's opening hours. However, the forex market is open 24-hours a day and it is worth noting that certain stock indices are always available for weekend trading.

Higher liquidity

It is fascinating to know that the forex market sees an average daily turnover of more than $5 trillion. On the other hand, the stock market sees comparatively fewer traders per day.

Greater volatility

The stock market also tends to have more stable prices. These prices change over a longer period. it is considered a great thing for some trading styles because the volatility of the forex market may create an exciting range of opportunities for shorter-term traders

However, when you are deciding whether forex or the stock market is better for you, always consider your attitude to risk as well as your financial goals.

More articles about Finance & Business
You'll find good info on many topics using our site search:
HomeSitemapEmail Webmaster