How You Can Increase Your Profit From the Forex Market More Than the Stock Market

By Yeo Kian Poh

As a result of global market players, the Forex market is open 24 hours a day. This can enables investors or traders to correct their positions at any time. Because of the large number of players like Banks, Institutions and Hedge Fund Managers etc, the Forex market has narrow spreads and nearly no price gaps. This lack of price gaps enables investors to count on no-slippage order execution. However do take note that in a very volatile market the likelihood for slippage do exists.

The Large volume of participants in Forex also reduces the chance for insider information or trading. Base on history, there has never been a case of complete currency collapse in a developed country. Forex volatility in the market rarely exceeds 1% per day unlike stock which can fluctuate up to 10% over one trading session.

Trading in the Forex market has the benefit of no transaction cost. Meaning forex brokers do not charge commissions. If they do it is usually relatively small. What you pay is only the bid/offer spread which can be view as transaction cost. Forex spreads can also be quite small in major currency. Unlike stock, once you buy you have to pay commission to your broker. It is usually a certain percent of the total amount of stock purchase.

Forex trading can involves in Long (buy) or Short (sell). It is just easy to take a short position as a long one. Unlike stock, there are some limitations imposed on selling short. Therefore forex trader can easily trade in a rising or falling market.

Forex trading involves leveraging too. With more buying power, you can increase you total return on investment with less cash upfront. However increasing your leverage also increase risk. E.g. With $1000 cash in a forex broker account that allows 200:1 leverage, you can easily trade up to $200,000 in estimated value.

In conclusion, Forex Trading offers a good option to make money in a 24 hours market. It provides leverage, low commission and low amount to start. There is also no insider trader to control the market. Last but not least you can also trade in a rising or falling market.

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