[The following is a guest article]
Currency trading and binary options have become a popular ways for investors to invest and make their money work for them. There are many benefits to currency trading that places this type of investing above other investing methods for some people. While foreign currency trading may not be the right investment strategy for everyone, many people have found that this type of investment provides the right amount of risk and return to meet their financial goals. Here are some of the best benefits of using currency trading as one of your main investing methods.
Round The Clock Access To Markets
Because the currency trading market is worldwide, trades can be made at any time there is a market open somewhere in the world. Currency traders can execute transactions beginning when the markets open in Australia on Sunday evening and continue until the markets close in New York on Friday. Online trading companies provide instant access to accounts from anywhere in the world and trades can be made over the internet in a matter of minutes.
Increased Liquidity
Because of the size of the currency trading market, large amounts of money can be moved into and out of a foreign currency with minimal price movement. This increases the liquidity of the positions that you hold. Liquidity is the ability of an asset to be converted into cash quickly and without any price discount.
Increased Leverage
Many brokers that provide access to the currency trading market allow investors make their trades using leverage. Leverage is the ability to trade more money on the market than what is actually in the trader’s account. The amount of leverage allowed will vary among brokers, but some have allowed investors to trade at 50:1 leverage, meaning that the investor could control a trade of $50,000 using only $1000 of capital.
Low Cost Transactions
Trading in the currency trading market is often less expensive than trading in some other popular markets. The cost of the trade is often rolled into the overall price of the transaction, reducing the fees that must be paid to the broker or online trading company that is handling the transaction. It is important to review any costs and fees associated with the trading company before authorizing any transactions to ensure that you know how much it will cost you to execute your trades in the foreign currency market.