The Forex market gives traders liquidity, wide variety of choice and accessibility that is unmatched in any other market. With the technology we have nowadays you can trade from any computer, smartphone or a tablet 24/5 Monday to Friday. What makes the Forex market so special is the fact that Forex is an OTC market. OTC stands for Over the Counter which means all transactions are being processed through a network of dealers worldwide unlike stock exchanges such as the New York Stock Exchange which is centralized in USA and depends on local banks, US financial regulations and working hours. This gives great flexibility to people who want to trade financial assets on the other side of the world. Therefore, traders have the freedom of choice when and what to trade. Another major advantage of Forex market is the option to open buy and sell positions on financial instruments without physically owning them. This provides more trading opportunities unlike the traditional markets like stock exchanges.
Another big difference is the trading time frame in the Forex market. With the exception of weekends, the Forex market is open 24h compared to traditional markets with predetermined working hours after which no trades can be placed.
There are three major trading sessions: the Asian, the European and the US sessions. The market is traditionally most volatile at the session beginning and close. Normally, every trading session sees an increased number of transactions in its respective currency. For example, GBP is traded mostly during the London session while the Japanese yen is traded mostly during the Tokyo session.
– Low spreads between bid and ask prices
– Option to trade with leverage which can increase your buying power up to 500 times higher than your balance
– Being able to trade 24/5
– Unmatched by any other market liquidity