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Benefits vs Risk of Forex Trading

Forex trading is not suitable to all investors. It is important that you understand the benefits as well as the risk of trading before mastering in any field of investment. Remember, you can build wealth in forex, but you can destroy it as well. By minimizing the risk, you should basically understand forex trading program.

Liquidity

Forex market is so unique that it is extremely liquid in the market, especially for the most popular currency pairs. There are up to 1.8 trillion US dollar being traded everyday. The trading volume is even 50 X larger than New York Stock Exchange. Participants are rapidly growing, from interbank to commercial company, non-financial company, private speculators and so forth. Unlike stocks marketing, there are always sellers and buyers on the other side. Due to its liquidity, you can stop/ limit/ open or close position freely. They always have some reason to trade in Forex. Please Visit:- 코인마진거래

For instance, Malaysia borrow money from Japan to build a D1, the process take 5 years, they hedge a rate first so that the fluctuating currency rate won’t affect the repayment…. Hence, the price will be more stable and not fluctuating as stock market. None of a trader could affect trend of currency.

24/7 Market

There are always buyers and sellers trading currencies in day and night. It allows you to respond even though some investment markets are closed. This minimizes the “overnight gap” risk. Normal operation starts from Sunday 5pm until Friday 4 pm at EST.

Low starting equity requirement

For day trading stocks is not an affordable investment for most people, especially those employees who earn secure income monthly. It requires the minimum of $25,000 to open a day trading account. You may doesn’t need to, if you gain satisfying profit and take it out within 3 days.

On the contrary, for Forex accounts, I have seen starting equity requirements as low as $200. We can manage forex account by credit cards. It is so easy to open an account, without much cash barrier. But …think deeper! This carries risk as well as benefits to you. What do you think?

Since the starting equity can be very low, it highly encourages more people to participate in low entry level. It gives opportunity to the investor who is low to set up “educational account ” and learn trading in minimum equity. It is a method to sharpen our skills and strategies. They can be trained to utilize strategies to set appropriate stop/limit to maximize profit.

However, it brings lesson to those who are lack of experience or financial illiteracy to take the speculative risk. It also lures people who dare to take risk without proper strategies or tools. This reckless manner of investment makes no difference with gamble. They might lose. At last, their cash will easily flowing out but can hardly understand a lesson.

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