By design trading in the forex market holds many more advantages in relation to trading on traditional stock markets.
24-Hour Trading Day
One of the clearest benefits of trading forex is the 24-hour trading cycle. Within the forex market no actual physical exchange exists where currencies are traded through. Banks around the globe trade with each other via the Inter-Bank system. While it may be the middle of night in Europe, the United States and Asia, there will always be a market open somewhere in the world that currency can be traded and made available. This cycle gives the investor the ability to trade on their own terms.
Lower Transaction Costs
When trading in the forex market, the only transaction cost to trade is the spread - the difference between the bid and ask prices. Making it more financially reasonable by comparison to stock and bond trading, where service and transactions fees are much higher.
Less Short Selling Restrictions
With the same margin requirements as buying long, a trader can sell short in the forex market without added costs and hassle. This allows traders to act on a bullish market as well as a bearish one. By comparison, many short selling restrictions and controls are in place in traditional equity market listings.
Thousands of Choices vs 6 Major Pairs
Unlike stock market listings that have thousands of choices available on 52 different exchanges globally. The forex market is focused on six major currency pairs that are easy to follow, trade, and research.
Accurate, Timely, Publicly Available Research and Data
The important statistics and data released by governmental bodies (e.g. Non-Farm Employment reports, Interest Rate Announcements, Manufacturing and Consumer Data) is made available publicly in real time. Making it less susceptible to manipulation, this makes the trading environment in the forex market a more level playing field for the individual investor.
Unlike purchasing stocks which requires manual execution via human intervention. Forex positions are executed anonymously via the Interbank System, making actual trading faster and more accurate which is a clear advantage when trying to capture the benefits of a strong market move.
The amount of volume traded on any given day in the forex market is nearly USD $4 trillion. While the prices themselves are based on straightforward supply and demand, large transactions of millions of dollars are tiny in relation to size of daily turnover. Filling large transactions in this type of fast moving market is much easier and helps maintain better price stability and consistency.
Adjustable Leverage and Contract Sizes
Leverage is a very powerful option in trading. It provides much greater market exposure, increasing the potential gain on any given position. However the level of assumed risk also increases at the same time. NSFX offers adjustable leverage options from 1:1 to 1:200.
Individuals concerned about the level of assumed risk can decide how much risk they feel is appropriate irrespective of the trading volume or account size. Clients of NSFX have the ability to trade contracts of 0.01. By trading with fractional lots, clients can reduce exposure and apply different trading strategies.
Use of Unrealized Profits
When trading in forex, unrealized profits are available to place new positions and manage existing ones.