Forex markets have some reasons why a choice for traders or investors around the world to trade in Forex (Foreign Exchange). Some reasons include:
Liquidity
Liquidity is a term used to describe qualitatively how easy to make a good deal for the out (exit) and entrance (entry). Trading was essentially involves two transactions is the opening position, followed by closing the position. Correlated with the volume of liquidity to allow for easier doing both incoming and outgoing transactions. Spot Currency Trading is one example of the market with transaction volume of the largest in the world that allows this to be the market's most liquid market for trading.
With the level of forex trading volume is 50 times larger than the New York Stock Exchange, there will always be brokers or dealers who want to buy or sell currencies in the forex market, which increases the level of liquidity of these markets, particularly its main currency.
Forex Market Information Transparency
The rapid technological developments as in enabling every person will have the same opportunities and the opportunity while performing transactions in Foreign Exchange Market. News can be updated at any time with ease.
Forex commission costs low compared to stocks and futures
High commission costs which will affect potential losses and gains. Forex trading (foreign exchange) for some broker or commission house there that does not provide discounted commissions. This is because forex does not have a centralized exchange like NYSE or the CBOT so customers do not have to pay with a certain fee.
Forex market is a perfect market for Technical Analysis
The forex market is a perfect market for technical analysis. Long-term movement is generally associated with economic market cycle. Economic cycles always have a tendency to repeat. Therefore, a trader or investor can predict with good data. Repetition is the key to technical analysis. Unlike the stock market, news from a certain company can change dramatically in a short time.
Because forex trading is a trade involving a country's economic situation, the forex movements are relatively more stable compared with the movement of stocks or stock indexes.
Leverage / Forex leverage
The key to determining the value of investments in financial markets is the ability to leverage large profits with very little capital. This is known as leverage. Viewed from perdangan futures (futures), the meaning of leverage is a state where the placement of a small number of funds that can be obtained profits or losses as a result of price changes that occurred, which amount is calculated from the value of funds placed. Someone had to be careful in using it as leverage levels or can be a double edged sword, on one hand can be very profitable but on the other hand is very risky.
Transaction convenience
Forex market is the market trading 24 hours, five days a week starting from Monday through Friday. Forex market (Foreign Exchange) offers a potential benefit that is greater than the Capital Market (Stock Market) by the time you can customize.
There are some good time to conduct forex transactions because it usually has a sharp movement for example:
- Opening and closing of each session
- The opening session of the European Market
- Opening and closing session of the New York Market