Forex is also called as “foreign exchange market or currency market”. It is a global marketplace for trading currencies. It determines the exchange rate of different currencies. Forex relates to buying, selling, of different things at different rates according to currencies. It considered one of the largest markets in the world.
Currency something important in people’s life. Wherever you live, there is a need for currency in one’s life. Every country has its own currency and you have to exchange it according to that country for business or trade. For instance, if you’re a resident of the U.S. and you visit France for Eiffel Tower, there is no value of dollars there so you’ve to exchange dollars into euros. In another case, Spain purchases footballs from Pakistan, so they will exchange their currency into rupees because it is not locally accepted currency.
The Forex exchange market has a link with larger banks of different countries because they participate in this market. Every country has a different time zone when trading ends in Japan, In New York, it begins. So, Forex works 24 hours or approximately 6 days a week and active almost all the time.
Table of Contents
Forex; Better for Trading:
As we have discussed bout the Forex and its importance in the whole world, No I am going to tell you about why It is better for trading so let get started;
. Better point In Trading:
It is the most important form of trading. But it is affected by many events and requires better learning options. Still, a popular and great marketplace for trading.
. Commission In Forex:
Taxes are not applied in Forex trading but fees are applicable in trading and the whole cost is not known until you complete the trading. When you are doing a trade broker will charge you fees that are his commission and it’s according to the number of trades.
. Uniqueness:
It works 24 hours and from Monday to Friday. It keeps the trader’s data safe and secure. Its number of traders is more than the other exchanging markets.
Advantages & Disadvantages:
Forex has its advantages and disadvantages as well and is given below
Advantages:
As Forex considered the popular forum for trading or exchanging currencies so it has more advantages. The advantages of Forex are described below;
. Trading Costs:
Taxes are not applicable in Forex but a broker can charge its commission or fees which are according to the number of trades. But the good thing about it that the commission or broker fees are very low in Forex. So one does not have to worry about commissions or extra charges in forex for starting his own trading.
. All-Time Working Market:
As we know Forex works 24 hours from Monday to Friday, five days a week. It is easy for every country to work according to their time zone. And because of this, the short-time trader can make their places for a short duration on Forex.
For instance, Japan is 8 hours ahead of the United Kingdom, when trading ends in Japan, it starts or already started in UK. And due to this, traders can easily make their way in Forex.
. Pairing Up In Forex:
There are almost 8 countries that became the participants in forex, and they pair up according to their currencies value and do among each other. Anything you want to clear about forex, visit; best managed forex account companies.
. Entry:
Forex allows short-term traders to make their places for a short duration, so they can earn profit too from their trading. So it is easy to enter the forex and start trading.
Disadvantages:
Forex has lots of advantages but it has few disadvantages that are given below;
. Lack of Clarification:
Forex does not charge extra fees or taxes but still few brokers that do not obey rules and charged their traders extra fees and took a commission from their trading too. Sometimes traders do not get enough profit from their trading but still, they have to fulfill and give commission to their brokers. It shows the lack of transparency in Forex.
. Risk in Trading:
There is a lot of traders in Forex that is doing their trades on daily basis. Some are long-term and some are short-term traders. They face their loss on daily basis Because of many traders. So there is more risk in investing in the Forex trading market. Lack of transparency, sometimes, become the reason for the loss of traders in Forex.
.Self-Directed Learning:
You can easily enter the Forex. But you’ve to learn everything on your own because there’s a lot of traders here. And you cannot compete with them in the beginning so some newbies quit after their first loss. They face losses due to limited training options in Forex.
Summary:
As we know Forex is the most popular forum in the world regarding the exchange currency market or trading. A trader in Forex should be flexible because he will face losses as well in his journey with Forex. Although Forex has few cons about limited training ways for a newbie. But still, it provides a great chance for Short term trader to make their way into the trading world.
