Over the past 10 years the FX market has grown in popularity amongst traders throughout the world. In this blog post you will find 5 reasons why many traders are now trading forex instead of stocks.
1. No Bear Markets – In FX trading, when one currency rises in value, the other must fall. Because of the relative nature of currency trading you don’t have to wait out a bear market before a good trading opportunity arises. And as you’ll see in the next point, there are opportunities literally around the clock.
2. Trade 24 Hours a Day – You don’t need to wait for the market to open or try to time your trading strategy in the middle of work when you trade forex. Because FX can be traded around the clock you can find a time to trade that is convenient for you. Whether it’s the morning, evening, or afternoon it is always possible to place a trade.
3. Greater Leverage – It is an industry standard for brokers to offer its traders leverage 100 times greater than the margin placed for the trade, and in some cases brokers offer as much as 200 to 500 times. Compare this to stock trading where it is a challenge to get more than 20 times leverage and it is easy to see why FX trading is so popular.
4. Simple Analysis – Trading stocks can be overwhelming and intimidating; FX on the other hand is much easier. There are only a handful of currencies you can trade and a simple strategy is to buy the currency you think is strongest and sell the one you think is weakest.
5. Automation – A popular trading platform known as MT4 allows traders to completely automate a trading idea or strategy at no additional charge. In addition, investors can purchase trading robots that will either generate signals or completely trade the account on their behalf.