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Advantages of Spot Forex Trading

Forex Market Information Sheets

While many UK traders will prefer to place forex trades as spread bets, others may choose to trade spot forex outright. And, many traders throughout Europe prefer the advantages to trading forex compared to investing with traditional methods such as buying shares, futures or options.

Forex benefits include:

Noticeable market trends Bid and Ask pricing
Leveraged trading 24-hour trading, 5.5 days per week
Large buyers and sellers don’t manipulate the market Real-time profits for continual trading
Apply your market knowledge

Noticeable market trends

As the largest financial market, the forex market offers very smooth and noticeable trends, compared to available in any market. No other market comes close to the volume and participation in the forex market, making it a haven for traders seeking fewer price gaps and erratic spikes, and other choppy conditions found in lower volume markets such as futures or options. Because the market is only closed briefly on weekends, market gaps (although possible) are limited, which results in greater and more consistent liquidity.

Bid and Ask pricing

Though some traders are unaware, all financial markets have a spread (the difference between the buying and selling prices). For example, in futures markets you may pay the spread, commission charges, clearing and exchange fees and a spread.

We offer traders tight spreads on more than 120 currency pairs, so the prices you see are what you get. You can make quick decisions in forex trading without having to account for fees that may affect your profit/losses, because they are calculated in real time.

Leveraged trading

Leverage, also known as gearing or lodging, gives you the ability to control a large market position by use of smaller amounts of capital. This also allows you to trade multiple positions because it leaves you with more available capital. GFT Global Markets offers its customers leverage on all its financial instruments. With our spot forex offering, as GFT customer, you can gear your trade up to 400:1.

24-HOUR TRADING

The spot forex market, in a sense, follows the sun around the world, and rarely experiences periods of illiquidity (low volume or widened spreads). As a spot forex trader, you can take advantage of the continual volume no matter where you are, no matter what time zone you are in. No longer do you have to wait for the bourse or exchange to open, but trade day or night well after the floor traders have ended their day.

Spot foreign exchange is one of the few true 24-hour markets. When trading spot forex, you get constant liquidity 24 hours a day, 5.5 days a week.

Large players can’t manipulate the market

Spot forex, is so large, that the liquidity of the forex market makes it very difficult for any one fund, bank or single trader to control a particular currency. Banks, hedge funds, governments, currency conversion houses and large net-worth individuals are just some of the participants in the spot currency markets, where the liquidity is unprecedented. This differs from the stock markets, which can be very susceptible to the buying and selling habits of large players.

Real-time profit calcuation

Spot forex offers you the ability to leverage your profits in real-time. Add any potential profits to your positions, and as you gain knowledge and trading experience, try more advanced trading strategies.

Apply your market knowledge

If you are familiar with other markets and trading strategies, then you can make the transition to spot forex trading. Fundamental traders speculate using news and economic data while technical traders watch for breakout patterns in consolidating market. Even advanced traders familiar with analysis such as Fibonacci can use technical trading methods to analyse trading spot foreign exchange.

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* GFT Global Markets is compensated by revenues from its activities as a currency dealer, including proceeds from buying, selling, converting as well as holding currencies and interest on deposited funds and rollover fees.

Spot forex trading is a leveraged product and therefore may not be suitable for all investors. Spot forex trading carries a high degree of risk to your capital and it is possible to lose more than your initial investment or credit allocation as well as any variation margin that you may be required to deposit from time to time. You should only speculate with money that you can afford to lose. Please ensure that you fully understand the risks involved and seek independent advice if necessary and prior to entering into such transactions.

Click here to read the full risk warning.

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