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Currency tutorial: Benefits of Currency Trading

Updated on August 22, 2012
Currency Symbols
Currency Symbols

Currency tutorial: Advantages of Currency Trading

Online Currency trading is becoming extremely popular among all types of investors. With the internet online trading facilities, an average investor is able to do currency trading. This simple and easy currency tutorial will help to give a glimpse of some advantages that it offers over other products like stocks, options.

High liquidity - This is the first major advantage of currency trading. There is always a complementary buyer or seller available if you want to close your deal. When bad times come, you can still sell and get out in right time. Also, when there is high liquidity, the spread between bid and ask is small. This helps a common individual investor to save the money that could have been wasted on the spread.

Good leverage - Leverage is a good tool when you have less money but you need to make lot of money. As the word "leverage" literally means, to gain an advantage through the use of some tool or simply as assisted advantage. Currency trading can offer leverage to those who have less capital and need to have higher returns. However, investors need to be careful as it can act as double edged sword.

Influenced by macro-economic data instead of micro economic data. Need to know only few important things, maximum can go up to 6. There is no need to tabulate an individual company's balance sheets, assets, liability and account sheets. GDP, unemployment rates, interest rates are very few factors determining the direction of currency movement.

News available at same time. Nobody can affect the market. There is no insider information possible as when Fed releases data, everybody knows at the same time. There is no opportunity of unfairness in the market.

Trading available 24 hrs, 5 days a week. For professionals and parents, who cannot trade during daytime. This offers the opportunity to work during night while holding other responsibilities. You can continue to work on currency trading at nights until you start earning good income to manage your expenses. It is a very good option for those who are part time investors.

Low transaction costs. Currency trading offers the benefit of low trading cost as many currency brokers offer no commissions trading. This is very useful as compared to options or stock trading where a big amount is just spent on the transaction costs itself.

This Currency tutorial meant to provide a simple summary of all the benefits of this new investment vehicle. This article endeavors to help a new investor decide whether currency trading is the right option for them.

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    • Ruchi Urvashi profile image
      Author

      Ruchi Urvashi 5 years ago from Singapore

      Thanks for your feedback. I tried to explain advantages of currency trading in simple way so that everybody can get some benefit from it.

    • profile image

      masmasika 5 years ago

      Great job. Although I am not a trading enthusiast and I am very backward with this kind of information it is always good to read different topics. Thank you for sharing. voted up.

    • Ruchi Urvashi profile image
      Author

      Ruchi Urvashi 5 years ago from Singapore

      Thanks for your feedback. Yes, forex trading skills can be gained step by step. This introductory article, currency tutorial, just helps to guide and share the benefits of currency trading.

    • laurathegentleman profile image

      laurathegentleman 5 years ago from Chapel Hill, NC

      Very helpful information, especially for people who have never been involved in trading before.

    • Ruchi Urvashi profile image
      Author

      Ruchi Urvashi 5 years ago from Singapore

      Hi Ruchira, answer to your question. Currency trading can be done during anytime. You just need to choose the suitable currency pair and when market is down, you can still be making good profit. For newcomers, there is paper trading where you practice in demo account and no money is involved. I did virtual trading for few years, before I started real money trading. It helps a lot and you get experience without losing a cent.

    • Ruchi Urvashi profile image
      Author

      Ruchi Urvashi 5 years ago from Singapore

      Thanks Ruchira for your feedback.

    • Ruchira profile image

      Ruchira 5 years ago from United States

      Good over-view Ruchi. Voted up!

      However, with the current status of the market, I dunno if trading of any sorts is good (being a cautious trader!)