Benefits of the Forex
Stocks vs. Futures vs. Foreign Currency Exchange (Forex)
Why trade the Forex? Let’s take a look at the top differences between the stock, futures, and foreign currency exchange markets.
Benefit |
Forex |
Stocks |
Futures |
| Largest Market |  |
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| Round-the-clock-trading | |
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| High Risk | |
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| Minimal or no comission | |
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| Flexible investments | |
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| Tax-free investment options | |
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| Up to 200:1 leverage | |
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| Most liquid market | |
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| Long-term investments | |
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| A few major currencies | |
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| Thousands of stocks | |
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| True diversification | |
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| Recession-proof | |
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Largest Market
The foreign currency exchange (forex) market is the largest financial market in the world. Over 40 times larger than the U.S. stock market, the forex sees a daily volume of over $3 trillion per day.
Round-the-clock Trading
The Forex market trades 24 hours a day, 5-1/2 days per week. More market hours means more time to trade–and on times you designate. Availability and convenience.
Minimal or no comission
Cutting out the middleman not only gives you flexibility when trading, but it means there are no commissions or fees on trades leaving you more margin left for a better profit.
Up to 200:1 leverage
The amount of leverage in the forex market appeals to any level of trader. Perks such as no investment capital necessary and increased buying power can be powerful trading tools. Leverage increases your buying capability and makes it easier to earn a large amount from a small amount.
Most liquid market
The forex market trades in one single day, what Wall Street trades in an entire month. The more buyers and sellers, the more efficient the market. Such liquidity in the currencies market increases flexibility when trading and improves order execution.
A few major currencies vs. thousands of stocks
This is a no brainer. Instead of spending your valuable time researching thousands of stocks, you have the flexibility to focus on just a few major currencies in the forex market. Moreover, there is more historical and tend data available for analysis.
True diversification
By investing outside of the U.S. stock market, you achieve true diversification by including foreign currency investments into your portfolio. Unlike the NYSE where you only buy the U.S. dollar, the forex market includes all of the world’s currencies.
Recession-proof
The forex market is a global open market. Because it is not easily prone to market manipulation, the forex market is immune to recession. Money can be made on any directional movements–whether they’re up or down, long or short. A currency does not have to be increasing in value for it to be profitable. In contrast to other markets, the forex market is not affected by just one country’s government or industries. Major currencies don’t fail.
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