There are a few advantages which the Forex trader enjoys which those who trade in the stock market do not.
1.Unlike with stock brokers, the investor does not pay commissions, per se, to the broker.
Instead, the dealers in Forex trading receive part of the “spread” (that is to say, the difference) between the buying and selling price of currency.
This is generally a very small amount per trade; a fraction of a percent.
2.You can trade on the Forex market any time which is convenient for you, unlike the stock market
- it is closed only on weekends, from 5pm Eastern time on Fridays to 12AM on Mondays.
3.As opposed to the stock market, it is nearly impossible for companies or individual investors to manipulate the Forex market. The volume of Forex trading each and every day prevents any one actor from having undue influence.
We all know of instances of the stock market being artificially influenced by unscrupulous persons and companies however.
4.Forex trading can be done with ,borrowed capital, , meaning that you need not have hundreds of thousands in liquid assets to trade currency in large numbers. This concept is called Margin Trading. A small amount of your own capital (less than 5 percent) can be used to leverage a large chunk of borrowed assets, which may then be invested.
Forex is traded in what is called lots, the normal size of a lot being 100,000 US dollars. Depending on the dealer with whom you deal you may be able to trade is smaller amounts, these are known as mini-lots or micro-lots.
