Trading Local Shares- 4 Advantages Over Forex Trading-rainlendar

Currency-Trading With rapid advancement in technology, even a small retail investor can trade variety of financial instruments that were previously the exclusive right of few investors. Forex is one such asset which has been opened to the masses. In the past only institutional investors could trade the currencies efficiently. But the arrival of online brokers has changed the scene and now anyone with a computer and an Internet connection can trade the forex. Currency trading promises opportunities of immense profits. Forex trading doesnt guarantee the profits. It is very important that you assess first the intricacies of the currency trading. For many people, trading local shares is better option than trading currencies. There are some aspects that favor trading in equities over currencies. Cash Basis Trading of Shares One of the striking features of forex trading is leverage. The currency market is leverage heavily. With high leverage, you can start with a small amount. With so little investment you can command big profits. But you should remember the fact that huge profit potential requires you to take up significant risks. Most people ignore this aspect and start trading. The result is that majority of the traders who start with little knowledge, fail miserably. As opposed, trading local shares doesnt involve huge leverage. You can even completely rule out the leverage and trade on cash basis. This will put limits on your profits. But it will also reduce the risk considerably. Successful trading requires your presence in market for a long time. Unleveraged trading in shares allows you by better managing the risk. You will require huge money to achieve unleveraged trading in forex. More Choices to Trade within a Short Span of Time One of the highly promoted aspects of forex trading is that it is 24-hour market. It is true that you can trade the currencies every second of the day. But you cant track the market all day. Your body needs rest. It is not possible to cover the market 24 hours a day. Also the number of financial instruments within forex is limited. Trading local shares gives you an opportunity to trade in hundreds of shares at the same time. Though you can trade the shares for a limited time, it goes perfectly with your other activity during the day. Choose the Long Term View Forex trading is treated as speculative trading as opposed to investment. Usually it comes with huge risk. For retail traders, it is not possible to invest in currencies, as you need to take lot of factors into account. But when you are trading local shares, you can speculate as well as invest for a long term. You just need to study the company and its industry. Most of the legends of Wall Street have taken a long term approach when it comes to equities. Serious money can be made easily from investing in local shares. Simplify the Study The macroeconomic factors of the country move the currency of that country. You need to study these factors while trading the forex. As forex trading involves currencies of many countries, you will have to keep abreast with the performance of these countries. As a retail investor, you may not be in a position to study all these aspects. But trading local shares requires only the study of the company, its business and the industry it is operating. You can do this very easily. This will help you to trade the share with higher degree of success. Trading local shares scores over forex trading in many aspects. With better risk management, you can trade equities successfully. About the Author: 相关的主题文章:


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