Whether you are brand new to trading and investing or whether you have been doing if for a while, you have no doubt faced the question, “what should I invest in?”
There are of course many instruments to choose from, not just stocks and shares, but also bonds and fixed income instruments, commodities, derivatives like futures and options and of course forex, which is constantly growing in popularity.
So why is forex gaining such favor with retail investors? There are actually a number of reason, but here are just a few.
1) The forex market is available to trade 24 hours a day.
This is one of the key reasons why so many people are choosing to invest in forex rather than stocks for example. Whereas you can only trade stocks while the exchange are open (during official trading hours), you can trade forex at any time of the day or night. So if you need to close out a position in the middle of the night following a market-moving news bulletin (such as an earthquake for example), you don’t need to wait until the exchange opens in the morning to do so.
2) Forex is an incredibly liquid market.
This is another attractive aspect of the forex market. You will never have any trouble finding liquidity if you want to open or close a position because the forex market is the biggest, most liquid market in the world. Compare this with the equities market where events like the “flash crash” of 6th May 2010 dried up liquidity in a number of stocks for a short period.
3) There are no restrictions on selling short
Another reason why many investors like forex more than stocks is the fact that if you want to sell a particular currency short, it is just as easy as buying a position and going long. Whereas in the stock market, there are all sorts of restrictions to short selling. In some countries (e.g. Germany) it is not even allowed!
So, three reasons why forex investing might be better for you than investing in stocks. Now it’s up to you!
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