Advantages And Disadvantages Of Trading In The Currency Market Read More About The Advantages And Disadvantages Of Trading In The Currency Market - Lesson Link

The most important features of the currency market

Huge liquidity and high trading volume in forex
As we mentioned earlier, Forex is the largest financial market and the highest liquidity due to the presence of many categories trading in the market, and this is not only one feature, but resulted in two other features that had a strong role in supporting the development and spread of the currency market:

Real-time execution of trading orders
Execution of your currency transactions takes place instantly in Forex, i.e. without delay for buying and selling orders due to the availability of huge amounts of offers and requests at all prices, unlike other financial markets with little liquidity where there is a kind of delay in execution in purchase transactions, for example, until a seller is available at the same price, Conversely, the execution of sales deals is delayed until the buyer becomes available

Transparency and difficulty in manipulating price movement
With an average daily trading volume of US$ 7.5 trillion (US$ 7,500 billion), it makes manipulation of market prices by traders in the forex market impossible, because this would require huge liquidity, unlike what happens in the stock markets in terms of speculator or trader controlling the movement of the stock price down or down. .

To complement this point, we answer an important question related to the reason for this liquidity and the huge trading volume in Forex, which is:

Who trades in the currency market?
The heart of Forex currency market transactions is the major investment and commercial banks in the world that carry out currency trading among themselves in the so-called "Interbank Market", and these investment banks number more than 2,000 banks around the world and are considered the cornerstone in organizing trading operations in Forex

Then the major investment banks fall into two categories of traders. The first category is traders for the purpose of speculation and profit from price differences in currencies. They are investment funds, investment management companies, hedge funds, and brokerage firms that, in turn, provide forex trading to their clients who are small individual traders.

As for the second category, they are traders for other purposes, that is, they do not seek profit from trading in the currency market, but rather they want to trade currencies with the aim of obtaining foreign currencies for commercial purposes, such as central banks that buy currencies from the forex market to provide foreign exchange for their government, and also multinational commercial companies that You need foreign currencies in order to import from the global markets.

Read more about the advantages and disadvantages of trading in the currency market - lesson link: https:\/\/www.arabictrader.com\/ar\/learn\/forex-school\/31

Forex trading is open 24 hours a day, 5 days a week
There is no such thing as a forex trading session, unlike the stock market, for example, in which the trading session is restricted to a specific time for opening and closing, and no deals can be executed before or after it. Adhere to a specific session time, and the forex market is closed on the weekends on Saturday and Sunday only.

This happens as a result of the succession of forex trading operations through various markets and financial centers around the world, as the forex trading day begins in New Zealand, then Australia, specifically in the Sydney market, followed by Tokyo, the financial center in Japan, representative of the Asian period, then Hong Kong and Singapore, and after a few hours it begins Trading in the Middle East from Bahrain, then in Europe, specifically from London, the largest financial center not only in Europe but also in the world, and finally in the United States of America from New York, where the day ends and a new day begins again in New Zealand.

Read more about the advantages and disadvantages of trading in the currency market - lesson link: https:\/\/www.arabictrader.com\/ar\/learn\/forex-school\/31

Forex trading is done in a decentralized way - OTC
The Forex currency market has no geographical boundaries and trading in it is not restricted to a specific place, as the market operates through electronic communication networks with the OTC system, which allows access to the market, display prices and trade in it from anywhere around the world using a trading platform or program for trading in the market.

Ease of following the forex market and limiting currency news
Compared to a market such as the stock market, we find that there are hundreds and perhaps thousands of shares of companies listed on the stock exchange, which may make it difficult to follow and analyze them and to select the best opportunities among them for investment or trading, but in the currency market we have a limited number of currency pairs that can be focused on, especially If we follow up the eight most liquid and traded currencies.

In this video, we explain what currencies are traded in the forex market, what are their divisions, and what are the most traded currencies

Read more about the advantages and disadvantages of trading in the currency market - lesson link: https:\/\/www.arabictrader.com\/ar\/learn\/forex-school\/31