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Foreign Exchange Trading has many advantages in comparison to stock or equity trading. Thanks to the current uncertainty of the exchange, many stock or equity traders are now thinking to trade the Currency market. Their main question and worried was why trade the Foreign exchange market? What are the benefits of the Forex market in comparison to the stockmarket? In this article, I am going to go through some of the benefits of Currency Trading.

24 Hour Worldwide Market - The Currency market is actually a 24 Hour World Market opens from Monday to Fri.. The Forex market starts each trading day from Sydney, Tokyo, London, and finally to New York. Regardless of whether it is in the day or night, there are always market participants actively trading the Forex market. Foreign exchange traders can reply very fast to any currency fluctuations or breaking stories instantly in contrast to the stock and future market. The ECNs (Electronic Communication Networks) in stock and future market are quite new products derived as an after hours extension to the regular trading hours. Many of these ECNs have unwell liquidity and there is no guarantee that a trade will be executed, or at a reasonable price. Often, stock or future market traders would wait till the real market opens the subsequent morning to complete a transaction at fair value.

Liquidity - The Foreign exchange market is the biggest and most liquid market in the world. According to a poll conducted by the Bank for Global Settlements (BIS) in April 2007, average daily trading volume for the Currency market reached an all-time record high of US$3.2 Trillion. A 71% increase from US$1.9 Trillion that was traded in April 2004. This increase is due mainly to the collusion of retail investors employing brokers electronic dealing platform. This amazing turnover is a bit more than all the worlds markets combined on any given day. With a daily trading volume bigger than all market combined, this may guarantee price stableness. With such liquidity, Currency exchange Trader can open or close a position without much difficulty and most vitally, will get a fair market price.

Opportunity to Make Money in Both Direction - There is not such a thing as "bull" or "bear" market in Forex. In Forex, it is of no concern whether the economy is expanding fast or in a recession. For stock trading, profits are sometimes made when the economy is growing fast. But we all know the commercial cycle is cyclical - all things that go up must come down. This is not the case in Forex market. Without regard for how major economies are performing, foreign exchange rates are always shifting, and this in turn will supply trading opportunity for traders to gain profit. Simpleness - There are not many major currency pairs traded on the Currency market. Therefore , traders can have a better feel of price movement patterns and behaviour. Where as in the stock market, there is literally thousands of stock to observe and it is not easy to follow many of them.

Small Trading Capital with High Profit Potential - These days the minimum amount wanted to open a trading account is less than $300. Due to competition, some brokers may even accept much smaller amount. In Forex market, this little trading amount could most likely earn masses of greenbacks per week. In stock market, this might not be attainable. Of course both market have potential to lose too , but in the Forex market, traders can make real money with much lesser trading capital. High Leverage of 100:1 - 100:1 leverage is commonly available from online Foreign exchange brokers. This is significantly exceeds the common 2:1 margin offered by equity brokers, and 15:1 in the futures market. Some brokers even offer bigger leverage of 100:1. Nonetheless it is very important to remember that while this kind of leverage allows investors to maximize their potential profit, the aptitude for loss is equally great. Leverage is a dubious weapon and requires the utilising of proper cashflow management. Without proper risk handling, this high degree of leverage cans also lead directly to massive losses as well as gains.

Trial Account - Foreign Exchange Trading has a novel feature called ?Demo Account? Or simulate account. This "Demo Account" allows the trader to trade using realtime price on the brokers trading system with the exact interface and function as a real account. With this simulated account, Foreign exchange trader could gain real market experience in trading without risking any capital. With Foreign Exchange Trading unique advantages, its of no wonder that more retail backers are participating in the Currency market utilizing broker?s electronic trading platform that are widely and generally available.