Forex Trading Advantages and Risks
In this article we will discuss the advantages of forex. Forex is a financial instrument that is Pair”. The rule for mentioning the currency pair, which is a stronger currency will be in front. For example, EUR / USD, if we buy EUR directly we will sell JPY at the pair’s rate, and vice versa.
Here are some major currencies along with the nickname that the currency has, namely:
- USD – American Dollar – Greenback – Buck
- EUR – Euro – Single Currency
- JPY – Japanese Yen
- GBP – Great Britanian Pound Sterling – Sterling – Cable
- AUD – Australian Dollar – Aussie
- NZD – New Zealand Dollars – Kiwi
- CAD – Canadian Dollar – Loonie
- CHF – Swiss Franc – Swissy
Actually, there are several other pairs that are not common, or commonly referred to as “Exotic Pair” such as USD / SGD. However, trading for exotic pairs is very rarely done by market players, so price fluctuations are not too large.
After we discuss a little about Forex Instruments, let’s move on to discuss the Advantages and Risks of Foreign Exchange so that trading activities carried out do not cause regret in the future.
Forex has the same principles as other trades in the real world, as well as in other virtual worlds. However, the Forex market has advantages that can be used as an “Edge” to get big profits in a short time.
24/5 Non Stop
You could say that currently only 2 currency markets are running 24 hours non-stop, namely the Forex Market and Crypto Market which recently became a trending investment and trade. With this 24 hour trading time, we can set our own schedule to participate in the market freely.
In the Forex market, of course we are free to act in accordance with our own beliefs without any restrictions. We can also reap two-way profits, meaning that when prices go up or down we can still make a profit as long as our expectations are right.
With a market that is always active it produces active price fluctuations as well, so that profits / losses can occur in just seconds.
Leverage here acts as leverage funds where with relatively small capital, market players can execute orders that require a larger margin.
If in the past trading exercises can only be done by “taking notes and paying attention” without a real action. It is different from the present where demo accounts with real markets and execution of transactions can be done. So, forex trading exercises can be done without a penny.
Actually, the risk in the world of Forex is only the opposite of the advantages above, but still we will try to explain it in more detail, so that the comparison becomes clearer.
With the increasing volatility and price fluctuations, not only profits can be obtained instantly in a short period of time. However, even large losses can be obtained instantly if the calculation done is wrong.
The risk to Forex Brokers (Brokers / Third Parties) is of course there. If you choose any broker, of course the risk of losing a deposit fund can occur. Especially nowadays there are so many brokers who have run out of funds from their customers. So, the most appropriate way to do this is by choosing a certified broker, as well as a trusted local broker.
Why is a personal trader a big risk ?, because basically all trading activities must be based on extensive knowledge. If a trader does not have the right “knowledge” in forex, it is not a beautiful dream of a “Holy Grail”, it is precisely the bankruptcy nightmare that will approach.