Why Invest in the Forex Rather Than in Stocks
The real reasons we trade in Forex Market
There is a widely held misconception that the best way to earn from your investments is through investing in stocks.
Yes, investing in the stock market is a good way to profit from one's savings but there are other ways one can invest money that are relatively much less complicated and demanding but as profitable, if not more, than investing in stocks.
Like investing in the foreign exchange or forex.
So why is the forex hassle-free compared to the stock market and what are its advantages over it?
The following are just some of the benefits when one chooses the forex on top of the stock market.
Top advantages that we trade in the forex market rather than stocks market.
- No need to monitor thousands of stocks.
Tired of monitoring several thousands of stocks like the 4500 listed in the New York Stock Exchange and the additional 3,500 in the NASDAQ?
With the forex, you only need to focus on the four major currency pairs. Though not necessary, you can also dabble in the 34 second tier currencies if you got some spare time and want to be really competitive and have advantage against other traders.
Express execution of market orders.
Unlike the stock market, there are no discrepancies between the price that one sees in the platform and the execution price needed to start the exchange in the foreign exchange market.
What you see is the price you get as there is price certainty in every forex market and trades are done real time.
- No short-selling restrictions.
In other markets particularly the stock market, heavy restrictions are made on short selling.
Such stringent measures are non-existent in the foreign exchange market as currency trading is a two-way process; one also buys currency simultaneously when he/she is selling a currency and vice-versa.
Hence, there is no structural bias on the foreign exchange market, as everyone has equal access to a rising or falling market.
- Highly sensitive market.
Traders in the foreign exchange market can (and most of the time they do) profit from such mundane news, for instance, a change in the interest rates.
This spontaneity of the forex creates infinite opportunities and advantages for every trader as they can always take advantage of the ebb and flow of currencies caused by simple rumors.
- 24 hour, commission-free market.
Free from additional transaction fees such as those from the government and middlemen and being open 24 hours a day, 5.5 days a week are advantages of the foreign exchange market not only over the stock market but to other financial markets as well.
Traders about to invest should be well informed of the advantages of forex so as not to waste time and money in investing in the complicated and demanding world of stocks as these advantages present the foreign exchange market as a viable, if not better investment alternative to the stock market.
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