6 Characteristics of Foreign Currency Exchange Market

6 Characteristics of Foreign Currency Exchange Market

Foreign Currency Exchange Market

The Foreign Currency Exchange Market is the worldwide largest market asset class today with almost 5$ trillion in daily turnover volume. That decides the currency value of the global countries and allows to do international currency exchange or trading. It has unique characteristics that make it excel from the rest of the other financial markets.

The characteristics that make the foreign currency exchange market a unique and good one are lower trading costs, 24/7 Trading Opportunity, superior liquidity, excellent transparency and Highly Leveraged Markets.

As it is a fundamentally unorganised market, the forex market has a large number of operations centres around the world. Among the most important are London, Tokyo, Singapore, Hong Kong, Bahrein, Frankfurt, Sidney, Zurich, Chicago, New York and Toronto.

6 Characteristics of Foreign Currency Exchange Market

Foreign Currency Exchange Market

1. Lower Trading Cost

In the forex market, the lower trading cost has made it possible for even small, individual investors to make the decent profits from trading. With lower costs, the possible losses are much lower. You will discover that forex trading has no commission fees unlike in other investments. The forex trading cost is limited to the spread or the difference between the buying and selling prices for a particular currency pair.

2. 24 Hour Trading Opportunity 5 Days a Week

You have plenty of opportunities to execute trades and sufficient time to make adjustments whenever and where ever such opportunities present themselves.

Trading the foreign currency exchange market opening on Monday, 8 am Australian time (which is 5 pm Sunday New York time). It continues nonstop until Friday, 4 pm New York time.

3. Highly Leveraged Market

You are allowed to trade on margins or technically on borrowed money with forex. You get more value for your money as the returns can be magnified a hundredfold. However, always remember that there always two sides of the coin when it comes to leverage meaning it can also increase your losses.

Click on Below Video: Dangers of using high Leverage in Forex Trading

4. Excellent Transparency

Forex trading is a transparent process because the forex trader has full access to market data and information that are necessary to achieve successful transactions. The excellent transparency that traders have more control over investments and decide what to do based on the available information.

Click on Below Video: United Kingdom’s Super Rich Billionaire Forex Traders

5. Access Advantage in Forex

You can access the foreign currency exchange market and your trading account from anywhere using internet connection without difficulty and trade from anywhere you may happen to be. With other financial markets, you need to be physically present to execute a trade.

6. Superior Liquidity

In a forex market, traders are free to buy and sell currencies of their choosing. The superior liquidity of the forex market allows traders to easily exchange currencies without affecting the prices of currencies being traded.

Whether you trade a thousand dollars or millions, you can be assured of same currency prices during the time an order was placed and executed. The forex market’s superior liquidity allows you to get the profits you expect at the time you made the trade.

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