Investing Advantages in Forex Trading – 1
Leverage. Investing in Forex trading has advantages where the investor does not need to use 100% of capital. Unlike investments in stocks, to get profit up to 100%, then the investor must spend 100% of capital. In Forex trading, to get profit up to 100%, the investors only need to use 1% of the capital. This is what is called "Leverage Effect" in the modern financial science. This is possible because of contract size in the calculation of profit and loss could reach 100-fold. Using only 1% of funds, the Return of Equity in Forex trading is substantial. If only 1% of funds needed, what about the remaining 99% of capital? The remaining 99% of capital can be invested in other investments, so that will increase the profits of investors.
Two Ways Opportunity. Unlike investments in stocks in which investors have to wait the price goes up if they want to make a profit. In Forex trading, investors have the opportunity to get profit in both the position of rising prices and falling prices; well as "bull market" or "bearish market". This is because in Forex trading, investors can have an "open sell position" first without having to have a "buy position". Thus, investors only need to analyze whether the price will rise or fall. If the price will rise, then investors only need to take a position "Open Buy" and then after the price rises, the position is closed with a "Closed Sell". If the price will fall, investors only need to take a position "Open Sell" and then after the price falls, the position is closed with "Closed Buy".
Manageable Risk. Risks in investing in Forex trading can be manage in accordance with the wishes of investors. Unlike when investing in real business, such as agriculture. In agriculture, investors face the risk of possible natural disasters, disease and pest attacks. These risks can not be avoided or regulated. Risks in Forex trading can be arranged. What percentage of investors willing to bear the loss, for example investors will stop investing in Forex trading if they had lost 25% of the capital, it can be done, so that investors suffered losses do not reach 100% of their capital. Examples of inward investors in the position of "Open Buy" at 1000 prices, they will be hoping the price will rise. If the investor invests in stocks and the prices are not rising, but instead falls, whether investors can book to the stockbroker so when prices fell up to 950, then the position of the investors will be closed? Of course not, no stock brokers who would accept that such orders. But in a Forex trading there are "Stop Loss Order" facility. With this facility investor can book's closing price. How much investors are willing to lose, if they just want to lose 50 points, then they can use the "Stop Loss Order" at 950. When the price was down to 950, then the position will be automatically closed, so the loss is only 50 points.
Source by Rizal Suryo Putro