A lot of advantages to online trading platforms currency on the foreign exchange market that stock market online trading platforms doesn’t have. Here are a few.
Advantages to online trading platforms
1. A twenty-four hour market
Foreign exchange markets are open to do business around the clock. Small investors who are starting out doing trades in their spare time can benefit from this, since they don’t need to juggle their schedules around opportunities to trade. This means that if you choose Forex, you can schedule online trading platforms when it works for you. It doesn’t matter if you’re a night owl who wants to trade at one in the morning. There’s a bank open in Tokyo.
2. Low cost of transaction
Since Forex brokers don’t work on commission, and no hidden fees are lurking in the fine print, you won’t pay a lot to trade. Broker fees are directly build into the trade as the bid/ask spread. This spread is the difference between the buying price and selling price of the currency, and it’s expressed in what are called pips.
3. Leverage/margin
online trading platforms on margin means that Forex traders have greater leverage in online trading platforms. It also offers the ability to make a very high profit on only a small investment. If you find a broker allowing a margin of a hundred to one, you can buy a hundred thousand dollars in currency with only a thousand dollar deposit. Remember that this leverage goes both ways and can lead to large losses if you’re not careful.
4. Fast trade execution/high liquidity
If you’re online trading platforms in currencies, that means you’re online trading platforms in cash – the single most liquid investment there is. Trades can be executed almost instantly, and there’s no need to sit around waiting for yours to go through.
5. Difficult to influence
The foreign exchange market is so large that it’s almost impossible for a single person, bank, fund, or even a government to influence it for any length of time. The stock market, on the other hand, can be influenced by things as small as a television analyst’s negative forecast.
Small sample size – Stock online trading platforms means that you have thousands of options, including international companies, large and small companies, and newly issued IPOs. It’s difficult to follow everything. In Forex online trading platforms, on the other hand, there are seven major currencies to follow. That means you can devote plenty of time to each. In fact, there are a number of successful Forex traders who don’t even trade in all seven currencies. You can just pick three or four and stick to them without a problem.
6. No bear markets
Because it’s possible to trade short or long, you can make money whether the prices are up or down. You just have to make the right guess.
- If you’re a trader, no matter if you trade stocks, futures, options or Forex, it’s a good idea to have a online trading platforms diary.
A online trading platforms diary is where you describe, as detailed as possible, all your trades. Imagine that you’re going to enter a buy order for GBP/USD. In the online trading platforms diary, you should write down all the reasons that make you enter in this currency pair, your state of mind and, if possible, take a screenshot of your chart. Also, write down if you have predefined stop loss and target points. Once you decide to exit the trade, describe, as deeply as you can, the reasons, your state of mind and also take a screenshot of the chart.
A online trading platforms diary is supposed to help you learning faster. If you record all your trades here, and after a while, come back and read it, you’ll see there were some good trades and some bad trades.
Don’t be scared since its part of the human being to make mistakes. All you need to do to survive in the Forex market and learn at a faster rate (gaining an edge) is to be responsible for the mistakes you did and try to learn from them. Everyone make mistakes, even the best traders in the world. Although, if you don’t learn from them, you keep on doing the same old thing… And seeing your account go down.
In my opinion, it is better to write more than less. This means that you should describe all things that come to your mind from the time you enter in a trade until the time you exit it. This way, you’ll be able to see some patterns and it might be easier for you to identify what you’re doing wrong and how you can start doing better.
Having a online trading platforms diary has allowed me to keep improving my online trading platforms; it still does. No matter what Forex system or strategy you’re using… If you don’t have a online trading platforms diary, you won’t be able to spot your mistakes and correct them. A online trading platforms diary is simply the best tool a trader can have.
