Forex trading is risky so it is one of the investment options in the portfolio. After they learn share trading, investors diversify their investment options across stocks, bonds & commodities with foreign currency due to several factors:
1) Forex is biggest contributor in the financial market
With a daily trading volume of over ₹6.7 trillion globally, the forex market can absorb trading sizes that dwarf the capacity of any other market. By comparison, this volume exceeds global equities trading volumes by 25 times. When you invest in forex trading, you work with millions of other forex traders, almost infinite trading liquidity and flexibility.
2) Forex works for you 24×7
Forex market never stops; it works on fundamentals different than share market basics. It is not dependent on a regulation to work on certain days and certain investment options. There is technically never a holiday. However, most dealers’ close operations on the weekends, so liquidity in the market become very thin compared to weekdays. That is why, trading positions can be entered and exited at any moment around the globe, around the clock, 5.5 days a week. There is no opening or closing bell as in the case of trading stocks. It is a 24- hour, continuous online currency exchange that never closes. This is great investment opportunity for most of the part time investors. You are free to trade in the morning, noon or night time of your day.
3) There is no Fast Selling in Forex
You can have an access to different sets of currencies. Currency trading happen in pairs as in US (Rupee) vs. JPY (Yen) currencies. There is no bear market scenario in the forex trading so there is no panic of falling rates like a share market. When you buy a particular currency, you actually simultaneously sell the other currency in that particular pair. That is, when you buy US (Rupee) you also sell JPY (Yen) to close the deal. With progression in the market the currency that you bought valuates or devaluates, it is up to you whether you want to continue buying or selling that particular currency pair.
4) Start with a Small Investment
You can start forex trading by making a small investment. There is no mandatory requirement to invest additional sum to trade in currency pair. You can start with the deposit amount agreed upon with a stock broker. The minimum deposit in the trading account ranges from ₹10,000 to ₹2,00,000. Your investment is not locked unlike it happens in share market. Forex trading function on liquidity of the forex market.
5) Leverage the Deep Penetration
You can invest more than you actually spend in forex trading. Leverage multiplier makes this possible. For example, if you have ₹10,000 in your account and have a 10 times leverage then you can take a ₹10,000 x 10 times = ₹100,000 value of the position. Different forex brokerage houses provide a varying amount of leverage in a range of 50:1 to as high as 300:1. Leverage is a risky preposition for beginners. It looks attractive as it allows you to make huge gains with a small investment. But there is a bigger catch here, losses are also amplified in case the trades go wrong.
You can trade anytime with share market app to earn money from your smart investments.