Posted by Blyca on October 21, 2019
Any business has good and bad sides. Forex trading is not an exception. As a trader, you need to know about Forex pros and cons characteristics of trading. When you know about that, you can evaluate the advantages and disadvantages of trading to decide what is suitable for your trading strategies.
Forex pros and cons: PROS
When you’re in Forex trading, you will realize a lot of advantages of this activity. Some of them are as follows:
Accessibility of trading
It’s easy for any traders to get access to trade Forex without difficulties. You can be easy to set up a trading account just in a short time (in 1-3 days) and begin to trade just with 50 dollars. When you do it in terms of brokerages, it can be traded online and many traders can get access to real time price, news, charts, tools and strategies on the market via many online platforms.
In addition, the market can be open any time (often twenty-four hours per day and five days in a week). If you’re busy with other business, it’s not a problem, you can join anytime that fits your routines than other types of trade.
Potential to Fast Returns
The speed of forex market can go fast. Also, forex market has an in-depth liquidity. When these factors are mixed with higher leverage to traders, it means that the potential to return can happen faster in the forex market than others. Some traders have to wait for a long timE to evaluate the asset, growth or returns from assets.
Fees & commissions are lower
When you trade in bonds, mutual funds, equities, and several instruments, sometimes you will be subject to costly commissions. You will never know some kinds of unveiled fees that can make your trading costlier than what you expected.
The costs of forex trading are calculated only by bid-ask spread, in which the difference between the buying and selling prices is announced by brokers with the real time. In other words, all information is transparent.
Forex pros and cons: CONS
Most of the traders will have a lot of challenges instead of success in forex market. Here are some of them:
This factor is common in Forex trading. Most markets can be volatile one time or another time. Forex market is no difference. For Forex traders expecting to get short time profits can meet the surprised volatility all the times. This doesn’t lead to a success in trading strategy.
Small traders can meet with disadvantages
Over 5 trillion dollars is traded a day on the market all around the world. Most of them are done with a lot of big players such as the bank, funds and many financial companies. Because they invest a lot of money in trading, they need to know a lot of information and technologies in a trustful way. Those players can have a big advantage at setting the prices and influencing movements on the market.
Also this reality becomes true to most of the markets, but it is very apparent on forex market. The traders need to keep in touch with the newest fast changes in market condition if they want to be sure that their trading can earn money.
Regulatory Protection is lighter
As you know, the forex market is a market that is not conducted at a centralized exchange, and the regulatory examination is sometimes set limited. Due to this, many traders need to do the process of carefully examining of their broker’s fame and their practices before deciding to set up for a trading account. In addition, you need to consider what country they are in, they can have less rights to be resorted if they are not treated fairly by brokers. I hope that this article will make you understand about forex pros and cons.