A simple question that is often asked by new investors before starting their investment in forex trading is why should I invest in forex? and what are the advantages of forex compared to other investments?
This article is available to answer the questions above. Here are some advantages of forex trading that other investments don’t offer:
High liquidity means
You can always buy or sell the currency you want to trade and there is no default. When you buy, there is always someone else who will sell it to you and vice versa. This happens because the scope of forex investment is a world exchange that is interconnected with one another. This is different from local exchanges (ex: JSE) where transactions only take place on that exchange, so there can be a failed handover event.
The capital required is relatively very small.
Compare this with other investments, such as stocks that require a capital of at least 20 million Rupiah or real sector investment which is usually more than 50 million Rupiah. Although in the past forex trading capital was also quite large, now in some brokers it is enough with a capital of $ 1 you can join trading. Not only that, there are even brokers who give you $5 of capital for free when you open a real account.
Trading hours 24 hours a day and 5 days a week.
There is no night or day in the world of forex trading. The market takes place 24 hours a day starting from the Asian market to the European and American markets. Compare this with stocks that are only open during office hours or the commodity market which is only open in the morning until noon. If you are an office worker, you can trade forex at night and not disturb your working hours.
In forex, anyone can join and carry out trading activities anytime and anywhere.
That’s right, investment knows no caste. Likewise with forex trading. Whoever you are, a trader, a worker, a housewife or even a farmer can join. And what’s even better, with the advancement of the internet, you can trade anywhere without having to go to the exchange in question or call your dealer directly. This can obviously save you time and money.
Investors act actively in their investments.
Unlike other investments where investors can only entrust their funds to be managed by third parties (mutual funds, insurance, deposits, etc.), in forex trading you are the one who decides for yourself when and how much you will invest by buying or selling.
Real time prices that you can access at any time for free.
Starting from the platform, indicators, price quotes, to running news, everything can be obtained for free. Even without opening a real account and making a deposit, you can also get all these facilities because the broker also provides a demo account complete with all the tools needed to trade on a real account.
Leverage offered can reach 1:100.
This means that with one share you spend, you can buy or sell as many as 100 shares. This is the advantage of margin trading where all that is needed is a guarantee to make a transaction. In this forex trading implemented with a capital of $ 100 so you can buy dollars as much as $ 10,000 and vice versa for selling. High leverage and low margins can basically increase profits, but it can also be the other way around. You must consider the risks and plan your investment well so as not to wallow in trading with a high level of risk.
Online reporting and transactions.
In the past, forex trading was done by telephone and written reports. The results of your transactions will be sent via email or even post every month. But now with internet access, your transaction reports can be accessed at any time without having to wait for the broker to report it to you.
Guaranteed security and confidentiality.
Even though transactions are carried out via the internet, it does not mean that the security and confidentiality of your information and funds are not guaranteed. The broker provides encryption of the data transacted. Meanwhile, your funds are also safely stored in a segregated account if you do it with a legal broker.
Forex clearly has advantages that other investment models don’t have.
Liquidity and market uptime can provide convenience, while the affordability of capital and a demo account is an advantage that offers retail traders opportunities. However, there are also risky points, such as leverage and the active role of investors in managing their own investments. To respond to it, you can consider it objectively and adjust it to your investment goals.
inspiration from: aroundforex.com