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So what advantage does forex have over other investment vehicles in the foreign exchange market?
When people generally think of different types of investments, what comes to mind most is the stock market. Although the stock market is a valuable investment avenue, it fails miserably in comparison to the profit opportunities available in the forex market.
Forex The foreign exchange market is not like any other market. It remains open 24 hours where there is no stock market. Most other investments also take large amounts of capital for you to actually make money from investing. To trade Forex, an investor only needs a small amount of capital due to the leverage provided by all Forex brokers. Some brokers allow traders to open an account with as little as $250. With this amount a trader can invest in a “mini” account and wants most appropriately. This account size allows the trader to buy lots of currency of 10,000 units. When the currency moves in either direction, each point (pip) is equal to $1. The most common lot size is 100,000 units of currency which is a standard account.
With over $2.5 trillion traded globally each day, there is a lot of liquidity in the foreign exchange market.
Most other types of investments are designed to lock up your money over the long term. This can come at a cost to the investor if they need to access capital. It may be difficult to gain access there without taking substantial damage to the account.
Forex trading also allows the trader to make money when the market is up and when the market is down. When you invest in the stock market, you need the stock market price to rise anytime you want to take a profit. Like all other investments, there are risks involved. But with the great volatility of the forex market, the profit potential of following a sound forex system far outweighs the risk.
Forex traders have the opportunity to open demo accounts and trade what people call “paper money”. It allows traders to practice their trading skills in live market conditions without risking their own real money. You just find a broker you are interested in and sign up for a demo account. Then you download their Trading Station software and you are on your way. This gives the trader valuable experience in the market without blowing their real money. This gives a huge advantage to the learning curve aspect of it. You will also be able to find many forex courses and online seminars that can further enhance your knowledge.
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