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Foreign exchange trading advantages


foreign forexrebateindonesia trad cashbackinforexg advantages Compared with traditional financial transactions such as stocks Forexrebateking futures, foreign exchange cashback forex has the following advantages:  1. High liquidity Earlier we mentioned that the average daily trading volume of the foreign exchange Forex rebate king reached 5 trillion U.S. dollars, which is close to one-half are spot foreign exchange trading, that is, the daily turnover of spot foreign exchange more than 2 trillion U.S. dollars, which is more than the stock market to Several times in addition, although the world has a variety of currencies, but the seven major industrial countries (G7) trading volume accounted for 80% In contrast, the futures market has hundreds of commodities, tens of thousands of stocks in the stock market, liquidity due to the increase in variety and greatly narrowed high liquidity means that investors orders are more likely to be received and executed by the market, to avoid low liquidity can not be filled and face price deviation incurred losses 2.24 The foreign exchange market can be traded at any time during the working day, so if any major event occurs in the market that is sufficient to affect the fluctuation of the exchange rate, traders can promptly adjust their transactions according to the situation, while in the stock market, assuming that a major event affecting the stock price occurs during the stock market break, traders can only enter the operation after the stock market opens, when the stock price may have made On the one hand, because the foreign exchange market is an over-the-counter transaction, not in the exchange, the broker and the customer can freely determine the transaction costs between the two sides; on the other hand, the foreign exchange market has a large number of brokers, the competitive market pulled down the overall transaction costs in the stock market you may trade a lot will charge about five ten thousandths of the trading commission, while in the foreign exchange trading 3. Leverage (high capital utilization rate) in the stock and futures markets, because there is no leverage or provide very little leverage, investors often need to look for volatility of the species to seek more profits while the volatility of the foreign exchange market is much smaller than stocks and commodities, investors mainly through the leverage ratio to determine their own trading For example, suppose an investor uses 1:100 leverage to buy 1 lot of USDJPY (worth $100,000), the trade takes up only $1,000 in margin ($100,000/100=$1,000) Suppose the USDJPY exchange rate rises by 1%, the investor gains $1,000 in profit if the investor is more aggressive If this investor is more aggressive and chooses a leverage of 1:200, he can open a 2-lot position (1,000 * 200 = $200,000 = 2 lots) while still taking a margin of $1,000, and with the same volatility, the investor gains $2,000 in profit Note that leverage is a double-edged sword, and while the investor has the opportunity to gain greater profits, he may also suffer greater losses due to leverage No bull and bear market (two-way trading) in the stock market, if the market as a whole in a bear market, due to legal restrictions, most investors are unable to sell short stocks, resulting in investment losses and in the currency market allows two-way trading foreign exchange, such as trading EURUSD, investors can buy the euro to sell the dollar, but also can choose to buy the dollar to sell the euro (that is, in the actual transaction to sell the EURUSD), even if the EURUSD is in a bear market, you can also get profits 5. News transparency all kinds of gossip often plagued the stock market investors, insider trading of stocks is endless even if there is no illegal trading, for ordinary stock traders, the hands of the stock information is often difficult to rival large institutions, information asymmetry often leads to ordinary investors in the trading In foreign exchange transactions, there is no such situation because of the huge volume of the currency market, any institution can not manipulate the exchange rate fluctuations in the currency market alone, even if the central bank to intervene in the currency market, can only cause more limited fluctuations in a very short period of time at the same time, causing large fluctuations in the exchange rate news data in the entire market are open and transparent, large institutions get the news data, as ordinary investors can also be in the first Time to obtain at the same time comprehensive above, we get the following table, reflecting the huge advantages of foreign exchange trading relative to traditional financial transactions spot foreign exchange and stocks and futures trading comparison spot foreign exchange and stocks and futures trading comparison
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