If you are reading this article, it's likely that you have given some consideration to investing in the forex market. Here, in my humble opinion, are the top 5 reasons that forex trading is an excellent choice for the individual investor:
1. Accessibility - Like the stock market, anyone with a computer can trade forex. However, unlike the stock market, the forex market is open 24 hours a day so that you can take advantage of financial news as soon as it happens rather than waiting nervously for the opening bell.
2. A Narrower Focus - Whereas the stock market is Real Profits Online smaller than the forex market in financial terms, the stock market has literally thousands of stocks to analyze and choose from. Forex, on the other hand, revolves around eight major world currencies. This narrower choice means less room for confusion. Even though the market is huge in dollar terms, it's much easier to get a clear overall picture of what is happening with the forex than it is with the stock market.
3. No One Can "Corner" the Forex Market - The massive size of the forex market prevents any one person (or even a group of them) from controlling market fluctuations. Even large financial institutions don't have great enough pull to effectively control the market. This makes the forex market a great place for individual investors to operate since the market is not subject to manipulation by others.
4. Greater Liquidity - The forex market is by far the largest financial market on the planet. With an enormous daily trading volume (over three trillion dollars worth!), the market is incredibly "liquid", meaning that you will always be able to buy or sell when you need to. In contrast, stocks are much more susceptible to becoming "illiquid" meaning that you could be stuck with shares that cannot be "unloaded" quickly should the need arise.
5. Leveraged Trading - It doesn't require a great financial mind to figure out that the greatest attraction of any investment is profit opportunity. On this front, the forex permits investors to use "leveraged" trading which means that a trader can open a position for say $10,000 on an actual investment of only $2,000. This gives an investor the potential for much larger profits on smaller investments.