Forex Trading is Better than Stock Market

Foreign Exchange or Forex (FX) becomes the alternative investment for who have suffered from the equities market which have been went through chaos recently.

Forex Trading is Better than Stock Market

There are plenty of reasons to learn Forex trading, such as:

Currencies tend to trend and are more predictable
Many astute currency traders believe that the movement of Forex market is in predictable patterns. Currencies have a tendency to trend as many traders say, “ the trend is your friend, until the end, when it bends”. This tells us that if you learned how to read the charts and found the trend, it would be the chance for you to make profit.
Historically, currency pairs found to follow certain movement pattern. For example, during the crisis, there will be “safe” currencies that investors flock to.

High degree of transparency of Forex market
Comparing to the currency or foreign exchange, the stock and bonds are found to be not predictable as it. Wall Street corporations have got a reputation for having the nasty habit where does not telling their investors everything. Worse yet, at the times they have stifled the truth because of the negative effect which could have on the corporate bottom lines.

Forex is a liquid market
Forex is the over-the-counter market which trades 24 hours a day, 5 ½ days a week. The large volume of trading dwarfs the stock market. It is undeniable that such a large market is extremely liquid where losses would not be occurred because of waiting for brokers execute the transaction, as the orders are executed at real time.

Low startup cost
There is a low startup cost for entering into the Forex market because the brokers would not charge commission for the trade. It is easy to start trading with few hundred dollars and it could multiply your investment if you know well about the Forex market.

Currency trading course
As there is still risk involve in the Forex market, it’s better to learn at least a few basics before you sign up with any broker. The Forex courses are available on the internet.

Unparalleled liquidity In the forex market, over $5 trillion worth of trades are traded daily, which makes the currency trading market the most liquid market in the world – trading in 1 day what Wall St. trades in 1 month. No matter what time of the day or night it is, the forex market is always moving, and around the world active traders are buying and selling currencies.

200 times more leverage than trading stocks With stocks, the maximum leverage is 2:1. But when you trade Forex with CMS Forex, you can use up to 400:1 leverage. For example, if you invest $1,000 in stocks, with 2:1 leverage you may buy up to $2,000 worth of shares. However, if you invest $1,000 margin on a foreign currency trade, at 400:1 leverage, you can control up to $400,000 in currencies. Leverage is one of the most appealing factors of the forex market. Traders should note that trading using leverage may increase potential gains as well as losses on any given trade.
Scratch-out the middleman Spot currency trading bypasses expensive middlemen that are always associated with trading stocks. With forex, clients are able to interact directly with the currency market, and can buy and sell at the simple click of a mouse. No mess. No hassle. No middleman.
Commission-free* With CMS Forex, you are never charged a commission. No clearing fees. No exchange fees. No Software fees. No brokerage fees.

*CMS charges no commission on your trades; we are compensated through the Bid and Ask prices or spread of a given currency pair. We may charge a fee for fund withdrawals. Please see Withdrawal of Funds for more information. Please be aware that the bank you deal with may be charging fees on your deposits or withdrawals. CMS has no control over any applicable bank fees.
Forex and the technical trader Because currencies typically develop strong trending patterns, a technical currency trader may potentially identify new trends, breakouts, and opportunities to enter and exit positions.

Measuring the currency market Currency prices are reflected in the balance of supply and demand for currencies. When it comes to currencies, there are two primary factors that affect supply and demand and they are interest rates and the strength of the originating country’s economy as a whole. Fundamental indicators, such as foreign investment, PPI, CPI, GDP, and the trade balance, echo the overall health of the economy, and alter the supply and demand for that currency. Expert commentaries and data on interest rates, International trade, and currencies are release on a regular basis.

Trade forex 24-hours a day When you are looking at your forex platform, you are actually looking at a window display of the world’s economy. Currency trading is available twenty-four hours a day, starting on Sunday at 5P.M. EST with the opening of the market in Sidney and Singapore. A short while after, the Tokyo market opens. Then London, which opens at 2A.M. EST on Monday. And, by daytime in N.Y., the currency market has already been very active for fifteen hours. With currency trading, you are able to decide when to trade. Trading stocks when the U.S. markets are closed is difficult and only offers limited liquidity. With forex, you can trade twenty-four hours a day, from Sunday at 5P.M. EST. until Friday at 5P.M EST.

6 major currency pairs vs. over 8000 stocks There are approximately 8,000 publicly traded companies, deciding which one to trade can become downright tedious and confusing. How do you determine which needle to pull out of the haystack? With Forex, there are currently 6 major currency pairs to choose from, and about 34 second-tier currencies.