forex benefits

We already have mentioned that factors such as the size,
volatility and global structure of the forex market
have all contributed to its rapid success. Given the
highly liquid nature of this market, investors are
able to place extremely large trades without
any given exchange rate. These large positions
are made available to traders because of the
low margin requirements used by the majority
of the industry's brokers. For example, it
possible for an investor to control a position
of US$100,000 by putting down as little as US$1,000
up front and borrowing the remainder from his o
r her broker. This amount of leverage acts as
double-edged sword because investors can realize
large gains when rates make a small favorable
change, but they also run the risk of a massive
loss when the rates move against them. Despite
the risks, the amount of leverage available in
the forex market is what makes it attractive for many speculators.

The currency market is also the only market that
is truly open 24 hours a day with decent liquidity
throughout the day. For traders who may have a day job
or just a busy schedule, it is an optimal market to trade
in. As you can see from the chart below, the major
trading hubs are spread throughout many different
time zones, eliminating the need to wait for an opening
or closing bell. As the U.S. trading closes, other
markets in the East are opening, making it possible
to trade at any time during the day.