A global 24-Hour Market
The forex market is unique in that traders can access a 24-hour market very conveniently, without having to wait for the markets to open. At any time, there is always a major financial center open where banks, hedge funds, corporations, and individual speculators are trading currencies. Traders can trade during
anytime of the day or night, and do not have to wait for any markets to be opened before placing their trades. This is particularly beneficial to people who hold nine-to-five jobs since they can trade it without any problems in the evening or night. The market runs 24 hours for 5.5 days a week because markets around the world open and close at different times. In stock or futures markets, you can only actively trade for less than 7 hours a day.
With the stock and futures markets, one would need to have access to electronic communication networks (ECN) for pre-market trading, or would have to wait till the markets open. The chances of the prices gapping up or down against you are high, especially if there have been news while the markets are closed.
World’s Most Liquid Market
According to the Central Bank Survey of the forex market conducted by the Bank for International Settlements, as at 2004, daily trading volume reached an all-time record high of $1.9 trillion, up 58% from 2001. Do you know that this humongous daily trading volume is about 20 times that of the New York Stock Exchange and the Nasdaq combined?
With about 80 percent of foreign exchange transactions having a dollar leg, you don’t have to worry about liquidity issues when trading any of the these big-economy currencies, which are namely, USD, GBP, EUR, CHF, JPY, CAD, AUD and NZD. However with stocks, futures, options or commodities, you tend to be restricted by their illiquidity especially during after-hours.
Buy Or Short-Sell Anytime
When trading stocks, short-selling is only allowed with an uptick, so it can be very frustrating for traders to wait and see their stocks trend downward, while waiting for an uptick. In the futures market, there is a limit down/limit up rule which kicks in when the contract value declines or increases by more than a certain percentage from the previous day’s close. However, in the forex market, you can short a currency pair anytime without having to wait for any upticks, and this translates to a more efficient and instant order execution.
Easier to follow and trade, due to the availability and minimal of data
As a examples, we trade the stock, there are many factors which must has to follow. Let say owning 4 or 5 stocks in NYSE, lets assume you are a serious investor, not gambler. The main point is that you must to know who are the shareholders are in every company you invest in, what the multiplier is, what the balance sheet look like, the profit and loss, internal information such as
resignation of an executive, a large future contract, and so on. it must have to know much information that following them in a daily basic would take long time each days.
On the other hand, in forex market, there are 5 to 6 significant data in a month. the firm which you trade will provide you with this data in a real time. You gain the knowledge will trade accordingly.
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