Foreign exchange markets is getting boom in terms of investments. The foreign exchange market is growing rapidly and the investors are also interested to invest in forex market. The foreign exchange market has many advantages. This market is real time market and it completely works based on the technical analysis. Though the forex market is very beneficial, it has gor few disadvantages too.
Let us first know the advantages of forex market.
Ease of Entry: It is easy for the investor to enter into this market. The foreign exchange market gives a demo account for an investor to learn more about market before they enter. Generally, to trade in local markets you need to take an account which requires large amount of money. The local market allows big lot sizes, whereas forex market offers micro lot size. Here you can start trading with minimum amount of $ 1.00. which is purely online based trading mechanism.
It is 24 Hour Market: Foreign exchange market is 24 hours working market with exception on weekends. The trader can do trading any where in the world at any time. It is easy for the trader to enter and exit at any time. The trader can access the market using the online trading platform.
Free Trading Software and Analysis Tools: In stock and futures market, a trader needs to pay for his technical analysis and software. In fact, some futures and stock traders pay for their order entry platform on monthly basis, whereas in forex market, all of the major forex dealers offer fantastic market analysis, order entry and platforms at no cost.
No Commission: In forex market, trader needs to pay the commission. If you trade in forex market, you can keep 100% trading profits without loss of commission.
High Leverage: This market gives high leverage, that means trader or investor can liquidate his positions at any time during the bank working days. There is high transparency in foreign exchange market.
As every market has some disadvantages, forex market has also some disadvantages.
24 Hours Market: There are many advantages with the 24 hours market and on the other hand there are disadvantages also. The trader cannot trade all the time (unavailable for trading platform during sleep), therefore the trader may miss an opportunity when the investment value goes up when he is not trading as there is no stop for the trading.
High volatile: Forex market is highly volatile in nature, because of it’s huge volume. There are many number of traders from different countries all over the world.
The above are the many advantages and few disadvantages of forex market.