6 Advantages Forex Trading Has Over Alternative Investments

Alternative investments is a broad category comprising non-traditional investments that can include futures and options, real estate, hedge funds and private equity investments. Forex trading is also considered an alternative investment, however, forex trading has a number of advantages over other alternative investments, which we will look at here.

1. A market that never closes – Forex can be traded 24 hours a day, five days a week because it is a global market with the different time zones.
2. High liquidity – Forex is the most liquid market in the world with trillions of dollars of turnover daily. More money changes hands in the foreign currency market every day than in all the stock markets combined across the world.
3. Margin trading – Forex brokers give their traders the possibility of trading on margin, which allows trades and possible profits to be larger than the deposit in a trading account. This has come about due to the trillion dollar market which means that for traders to be able to take advantage of minor price moves, positions must be large enough to result in significant profits. This differs from other forms of trading which only allow traders to use capital that is within their trading account.
4. No commissions – While this should not be a deciding factor of whether you will trade in the forex market or not, it is an added bonus. In the currency market, unlike in other markets, commissions do not exist. The cost of trading forex is the spread which is the difference between the bid and the ask price and this tends to be tight in the forex market so that forex trading has become a cost-effective way of trading.
5. No controlling the market – Because the market is so huge with so many participants, there is no one entity that can control the market price for any extended period of time.
6. Technological development – Technological development is constant with forex trading and the trading platforms made available by forex brokers are new and advanced. There are many third party software suppliers with useful trading extensions to help you be more successful with your forex trading.