Post by geriatrix on May 8, 2016 9:07:38 GMT
Pro:
Foreign exchange markets give investors a lot of leverage when trading. In other words, a small amount of capital can go a long way. In fact, some markets allow a leverage ratio of up to 100:1. In other words, a single dollar can be worth up to $100 when trading. This means that you can earn a lot of money with a relatively small investment. Another advantage of forex trading is that the markets are open 24 hours a day, five days a week. The markets are only closed on weekends based on a standard time. This means that you can trade at any time of day or night that is comfortable for you. One of the biggest advantages of the forex market is that there are fewer fees involved, in comparison to other markets like the stock exchange. In forex trading, fees are normally limited to the spread (the difference in value between the two currencies being traded) of the transaction. Lower fees means that you have more money to save, invest, or spend on other things.
Con:
One of the biggest disadvantages of the forex market is that it is fast and volatile. Although this means that you can make money fast, the downside is that you can lose money just as fast as well. Currency values can change without warning, making it difficult to accurately predict where to invest your money. Although good leverage can help you make bigger investments with smaller capital, it can also lead to losses that are greater than what you initially invested. Just as you can make $100 for every $1 of capital, you can also lose that same amount. Another downside of forex trading is that your Internet connection may fail, causing you more problems. Some of the problems that you may encounter if your Internet connection goes out include incomplete transactions and inability to monitor the market. In such cases, you will be held solely responsible for the effects of disrupted Internet connection.
Foreign exchange markets give investors a lot of leverage when trading. In other words, a small amount of capital can go a long way. In fact, some markets allow a leverage ratio of up to 100:1. In other words, a single dollar can be worth up to $100 when trading. This means that you can earn a lot of money with a relatively small investment. Another advantage of forex trading is that the markets are open 24 hours a day, five days a week. The markets are only closed on weekends based on a standard time. This means that you can trade at any time of day or night that is comfortable for you. One of the biggest advantages of the forex market is that there are fewer fees involved, in comparison to other markets like the stock exchange. In forex trading, fees are normally limited to the spread (the difference in value between the two currencies being traded) of the transaction. Lower fees means that you have more money to save, invest, or spend on other things.
Con:
One of the biggest disadvantages of the forex market is that it is fast and volatile. Although this means that you can make money fast, the downside is that you can lose money just as fast as well. Currency values can change without warning, making it difficult to accurately predict where to invest your money. Although good leverage can help you make bigger investments with smaller capital, it can also lead to losses that are greater than what you initially invested. Just as you can make $100 for every $1 of capital, you can also lose that same amount. Another downside of forex trading is that your Internet connection may fail, causing you more problems. Some of the problems that you may encounter if your Internet connection goes out include incomplete transactions and inability to monitor the market. In such cases, you will be held solely responsible for the effects of disrupted Internet connection.
