Forex is a liquid market. Transactions (purchases or sales) can be executed there instantly (therefore in real time) without any difficulty given the volumes traded (4000 billion dollars per day). Moreover, given the importance of this market which is global (with a multitude of players and contributors), the price variation can never be impacted by the trader’s buy or sell order.
The forex is open continuously a little more than 5 days out of 7. It is therefore an accessible market. It has the advantage of being global and of giving the possibility of buying or selling a currency pair with great flexibility. The fact that the forex market works in this way is made possible thanks to the existence of different major financial centers which have different opening slots. This is the case for the financial centers of London (the most important in terms of forex operations), New York (the second place), Tokyo and Sydney.
Forex allows the use of significant leverage effects. The leverage effect makes it possible to make substantial gains (it can also generate losses) from relatively small market variations since the variation in currencies rarely exceeds the threshold of 1% per day (significant movement in the forex).
Different leverage effects are available from brokers. They depend on the offers of brokers with from 20 to 400 times the amount deposited in his account by the trader. A client who has 2,000 euros in his margin account can invest with a leverage effect of 100 up to 200,000 euros and realize gains on the basis of this capital.
Losses on a forex account cannot be greater than the balance of the account since the closing of client positions is automated in the event of a lack of sufficient cover. Each investor therefore has the possibility of choosing his leverage effect according to his aversion to risk and his search for yield.
Forex makes it possible to seize opportunities for gains in the event of a rise as well as a fall since it is possible to sell a currency (short) if the investor anticipates its fall and conversely to buy another currency if he anticipates its rise ( long). Profits are therefore achievable in the event of an increase as well as in the event of a decrease.
Forex trading can be done from a very low capital outlay (given the leverage effect). Most brokers offer the possibility of opening a margin account with a minimum deposit which can go down to 50 dollars. There are thus micro forex accounts or nano forex accounts open to all stock exchanges.
One of the other advantages of Forex and currency trading is that forex brokers are remunerated through the spread (margin between the buying and selling price) and do