The foreign exchange (FX) market today is the largest and most truly global financial market in the world. According to the Bank for International Settlements, trading in FX markets averages more than $5 trillion per day and, unlike other markets, it trades Monday to Friday, 24 hours per day.
There are benefits to this. We can help you leverage those benefits as effectively as possible using TECHFX TRADERS FX Reports and Analysis.
Limited gap risk
Due to the huge liquidity and the round-the-clock trading, there is significantly less of the “gap risk” often viewed in other security markets. For example, gaps in individual stocks are often viewed between the close of one day and the open the next. Or after a company reports lower or higher than expected profits, gaps of 5% or more are not uncommon.
Extremely suitable for technical trading
Without pronounced gaps, the charts of FX pairs are much cleaner and, given FX markets often engage in multi-year trends, they are extremely conducive to technical trading strategies. Perhaps due to the size of the market, FX charts respect important charting points and price levels well. News announcements that have the potential to create volatility are extremely well-publicised, pre-scheduled events during which you can choose to sit out or manage your risk accordingly.
Ability to trade in both directions regardless of market direction
As the TECHFX TRADERS Bull and Bear Logo implies, the currency market allows traders to profit when currencies both rise and fall. One of the main trading philosophies is to buy low and sell high, but with FX you can also sell high and buy low. This grants traders the flexibility to catch both downward and upward trends.
Low cost, with no commissions, exchange fees or clearing fees
The cost to trade with most FX brokers is the spread. This is the difference between the bid and the ask price. Spreads in the FX market also tend to be much less (or tighter) than the spreads applied to other securities, such as stocks. Another unique cost advantage of FX market is price data vendors and brokers provide price data for free and there are no clearing charges involved. This makes FX trading one of the most cost-effective means of investing. Please click here if you need help selecting a broker.