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The advent of the internet has made it easier for investors, and especially for online forex investors. Therefore, forex trading can be done online. It differs from stock trading as it involves the online exchange of currency with the aim of making profits.
Online forex trading offers the advantage of convenience by allowing investors around the world to trade at any time and from anywhere. All you need is a computer and an understanding of trading requirements to start practicing.
An understanding of online forex trading is vital for the purposes of ensuring proper investment of money. There are many forex trading websites that offer practice accounts to help investors learn to trade up and down. The benefits of online forex trading include:
24 hour trading
The market is open 24 hours a day all over the world. This means that you can trade anytime, day or night, as there is an open market in any part of the world. Businesses are usually open from Sunday evening to Friday evening in many parts of the world. A 24-hour market allows investors who are busy during the day, perhaps due to full employment or being in business, to participate in the market during their free time.
High Liquidity
An asset is said to be liquid if it can be easily converted into cash without employing a price discount to attract buyers. Online forex trading is highly liquid in the sense that large amounts of money can be moved in and out of most currencies with very little price movement. Moreover, you can exchange currency at any time of the day and night without any restrictions being placed on you.
Low transaction cost
Forex trading has low transaction costs as compared to trading in the physical market. The broker has been able to share some of the benefits in the form of cost savings resulting from facilitating online trading. Transaction costs are covered by the price, called the spread, which is the difference between the buy and sell price.
ยท leverage
There are a number of trading strategies that can be employed by investors, such as leverage to maximize trading profits. Leverage is the ability to trade currencies in excess of the currency available in the investor’s account.
Online trading accounts allow investors to start trading with as little as $50. In contrast, trading with stocks and bonds requires huge financial investments. So, if you chose to trade on 60:1 leverage, you could trade $60 for every $1 in your account. Therefore, you can control $60,000 using $1,000 of capital.
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