Advantages and disadvantages of Forex currency trading

 Advantages and disadvantages of Forex currency trading


Forex trading, Forex currency exchange market has high liquidity This means that with a click of the mouse under normal market conditions you can buy immediately and sell at will and once you enter any deal you can place orders for the online trading program in which you can automatically close your deal in Your desired level of profit, with the entry of the "stop loss price" or "profit taking price" order you can easily end your deal.


Forex trading features


Market is open 24 hours


In Forex there is no waiting for the opening bell "as in the stock market" the foreign exchange market does not sleep, and this is very desirable for those who want to trade without restrictions according to their other working times so they can choose when to trade - morning, noon or night.


The possibility of opening small accounts


If you think about starting trading like currency traders, you can do that with small money. In fact, forex brokers mediate in the currency exchange market on the Internet to offer small trading accounts, you can start depositing an account below $ 100 or less. This will make the way for you easier to learn currency exchange, currency trading on The Internet may start with a small account and may open an account with $ 100 or less.


Eliminate additional brokerage


Spot currency trading eliminates brokerage and allows customers to interact directly with the market, relying on pricing for a particular currency pair, which does not cost the trader any expenses at all.


There are no fees or charges for services


There are no fees, no additional expenses for services, no fees for opening new accounts, no government fees, taxes, and no commission at all, as brokerage firms compensate for their services that they provide by obtaining the spread or what is known as the difference between the purchase price and the selling price A deal has a pip difference between the currency pair traded.


The cost of the transaction is very low


The cost of the deal is just the difference between the purchase and sale price, what is known as the spread. Typically, it is less than 0.01% under normal market conditions, even no matter how large the size of the deal. The difference will not exceed 0.07%. (Transaction cost).


No one can control the market


The currency exchange market is a very huge market and it has many participants and since it has no single headquarters and not even a central bank that can control the market price for a long period of time and even enter from the huge central banks to address market prices become ineffective and short-term very.


The disadvantages of foreign currency trading in the Forex market


There is no exchange of bad deeds in Forex, as some say, is the absence of an exchange system in Forex trading. Some traders find comfort in knowing that there is an organized mechanism that supports their participation in the market. What is more, the lack of a central data point means that the currency market does not have the large information addition that stocks and futures hold.


The complex nature of market analysis techniques, technical analysis is useful in Forex just as it is in any other market. Currency exchange rates are affected by a variety of factors, which can fluctuate over time and this adds to the complexity of the market nature.


Bilateral in each center: by its nature, there are always two sides to So, meaning for any particular exchange rate there are two countries (or two regions) to take into account the foreign currency, because currencies are priced in terms of their value against each other.


The biggest disadvantage in the Forex market is the speed with which prices move in different directions. Simply issuing a certain news may lead to significant changes in the price movement significantly, usually in just a few seconds, and this usually leads to severe losses for traders.

walid
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writer and blogger, founder of alaa5 .

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