There are several ways that a financial investor can look to increase their funds and portfolios. Many are seasoned professionals with vast experience under their belts, while there are those who are looking to take their first steps into the sector and may wonder which are their best options as they begin trading.
Much of this depends on how much collateral they have available to invest, but the general consensus among professionals would be to trade forex, especially when there is a trading platform available which will offer a free demo and offer expert advice, but what is forex?
- The foreign market exchange, to give it its full title, is basically an over-the-counter market for trading foreign currencies. Forex rates are determined for each currency by the market which can be influenced by several factors. The economic state of a country either strengthens or weaken their currency, through unemployment rates, interest rates, and government debt. Political instability, trade deals, or upcoming elections, are a factor too, as does a supply for a specific currency.
- Forex is attractive as it provides many short-term opportunities with a vast range to invest in, which is assisted then using a highly regarded platform. Because it is dealing with currencies right around the world with its different time zones, trading takes place 24 hours a day for 5 days a week, offering even further opportunities to make it convenient.
- The liquidity in forex is unmatched. Because traders can respond instantly and over a longer period, it allows them to capitalise on fluctuations, which will see further movements. Available leverage and pairings dependent on the platform being used also add to the attraction, with investors being able to make a big profit after a small deposit accesses a far larger trade size, although caution should be taken as it also magnifies losses.
- Platforms also offer multiple forex pairs to choose from to make a profit, along with tight spreads which offer opportunities among the $4 trillion a day which is traded in a day. All of these can be monitored on a PC or mobile device when selecting a platform that also has its own app. The transparency provided compared to trading in stocks or commodities also appeals to many as they can keep abreast without any interference from outside sources.
- Traders can manage their risks better in forex, as it offers flexibility in position sizing compared to stocks and futures markets. It also provides a low cost of trading, with it generally being a tenth of that of an average stock trade, making it an ideal way for beginners to start off. It also allows for short- or long-term investments and often has tax-free benefits. For those requiring assistance, it is available through financial experts who fully understand using forex to hedge.
Forex trading offers many benefits over stocks and shares, with the long trading hours, its unparalleled liquidity, accessibility, and available leverage among them. All of which are assisted when opening an account with a leading trading platform.