Top 5 Reasons Why Forex Trading Can Be a Simple Way to Increase Cash Flow
The Forex Market is the largest market in the world, with trades amounting to more than USD 3 trillion every day. In the stock market, people spend incredible amounts of money on products or services they believe will increase in value. With hundreds of thousands of products on that market, it can be somewhat confusing as to how to trade, when to trade, and what to trade in order to bring in money on your investment. Forex trading is much easier to understand and has a few perks that the traditional trading doesn’t offer.
Perk 1 – Less product
Forex trading has the great and simple benefit of trading currencies instead of products. The purpose is to buy one currency at one price, and sell it at a slightly higher price when its worth has increased. A great example is to buy 1 Euro at 0.9875 USD and sell at 0.9878 USD. Though this is only a small margin for one Euro to increase in value, it does add up when you are selling 100,000 Euro. With that said, you are only focusing on 1 product and the value of that product in comparison to other currencies as opposed to buying 100,000 hair dryers and hoping they sell for more than you bought them for.
Perk 2 – Making Money from Depreciation
The Forex Market is always moving. If one currency declines in value, it is because another is rising in value. Because of the constant movement of the Forex Marketplace, you can sell one currency as it is starting to decline, only to buy it again at a cheaper price than what you sold it. Forex Trading is great for this because you aren’t buying a product only to have it be worthless and never used again. It will only depreciate in value, and then raise in value. All you have to do is know when to sell your currency, and buy it back.
Perk 3 – 24 Hour Trading
Trading on the Forex Market has the bonus of always being open. You have the advantage of always knowing what is going on in the market as it happens.
Personal Perks of Forex Trading
Perk 4 – Liquidity
Because of this incredibly large worldwide market, Forex trading allows you to be extremely liquid with your trades. The trading is done online, or “interbank” marketplace, and allows you to buy and sell instantly at the click of a mouse. You will never be stuck in a trade. You are able to set automated platforms to sell your trades if the market appears to be in decline.
Perk 5 – On The Spot Trades
In Forex Trades, the most popular marketplace is the “spot market”. This is because all trading and transactions are done “on the spot” and not at earliest convenience. This means from the time you buy or sell, transactions hit the bank within 2 banking days. This allows for a more realistic look at what your doing in the market and where your assets are.