Trading in stocks and shares has evolved quite a bit with advancing technology.
More people are now aware of what these mean and how you can benefit from investing in stocks.
Earlier, there were only a few who understood what it meant and how to manipulate their investments to increase their value.
Technology has made sharing of knowledge easier and hence a lot of people have access to information about stocks. Furthermore, new industries, growth, and opportunities have made it possible for more people to use this avenue to earn some money on the side.
When we talk about investing in the markets, the first question that comes to our mind is the risks involved. The risks involved will certainly depend on the market in which the investment is made.
Different types of Markets:
• Primary markets- This is the market where a company decides to raise funds from the public for expansion in the form of Initial Public Offering.
• Secondary markets- These markets are used where the stocks that you own are traded. So, people can sell and buy shares already owned in this market.
• Energies market- You can invest in the companies that deal with Oil, Gas or Petroleum.
• Metals, Indices- You can trade in metal stocks in this market- gold, silver, aluminum etc.
• Other commodities- There are markets where you can trade in products such as Wheat, Sugar, Pulses, Steel and so on.
• Forex market– You can invest in currencies and take advantage of the superior or inferior positions in the currency market.
Why Forex?
Historically, trading in currencies has always been done by big well established multi-national companies and experienced investors. However, in the recent years, global economic instability has opened this market to everyone including the average investor.
Where multinational companies are concerned, trading in the foreign exchange market gives two-fold benefits. One, they can trade in different currencies owing to their presence in several countries. Two, their demand for local currency is met through such transactions.
For regular investors, opportunities to make money are presented due to the movements of the currencies. Keeping a track of the several currencies and basing their investment on this allows them to earn a quick return.
Unlike stocks and shares where information that affects their movement in the market is not available to everyone, currencies are affected by news and information that is available to everyone and hence provides a level playing field for everyone.
If you are an experienced trader and have been involved in the markets for a long time, the foreign exchange market is perfect for you. By tracking and following the currencies, you can make an informed investment.
Benefits of Trading in forex:
There are huge benefits for trading in currencies.
The forex market is open 24 hours and is open for trading five days of the week. All the major currencies are traded in the major financial markets of the world like London, New York, Singapore, Sydney and so on. Since it is dealt all over, you will find a market open for transactions when you decide to trade.
Some benefits of trading in these markets:
Technology has offered a great many benefits for people who are interested in trading in the forex markets. There are tons of software and apps created by companies which can be used to improve your performances.
In addition, the forex brokers or websites also offer various tools online that can help with understanding your investments and how to better them. You can not only track your investments and their performance but also initiate transactions based on advice posted on such websites.
Short trades are quite popular because it is possible and easy to sell high and buy low. This means that you can execute a sell order on a currency knowing that it will increase in the future and buy low. Such trades are possible in stocks and shares but are a little more complicated.
Access is another key benefit for trading in foreign exchange. While most brokerage firms require you to deposit a decent sum of money in order to start trading in stocks and shares, trading in foreign exchange can be initiated with a smaller investment.
