1: Equal trading for beginners
The forex market is said to be dozens of times larger than the entire global stock market, with some estimates suggesting an average daily trade of about 150 to 200 trillion yen, and Japan’s annual budget of about 80 trillion yen is a staggeringly large one. At this scale, the power of the market is greater than the power of insider trading and government intervention. Therefore, the market is rational and fair, and it is easy for everyone to trade on an equal footing.
2: Low fees
Transaction fees” are the fees you pay to a trading company when you trade foreign capital. Trading fees vary from one trading firm to another, but many trading firms set no trading fees for FX. Even if a commission is charged, in most cases it is 3 to 5 cents per dollar.
Compared to a foreign currency deposit at a bank, it is 1/40th, so the transaction fee for FX is clearly lower. And it comes with a favorable interest rate that is similar to or even better than foreign currency deposits. When compared with stock investment, a round-trip transaction of $10,000 (about 800,000 yen) with FX will result in a commission of about 500 yen in Japanese yen, and it can be said that the commission of stock trading in online trading has recently become cheaper, and it can be said that it is more advantageous than stock investment in terms of commission.
In particular, there are many overseas FX companies with narrower commissions (spreads) these days, so overseas FX companies are recommended.
3: You can aim for big profits with little capital.
“Leverage”, which allows you to aim for large profits with little capital, is another major attraction of Forex. This is because even if you have a small amount of capital on hand, you can trade for many times your cash on hand by depositing that equity capital (margin) as collateral. Although leverage can be applied in other trading, the upper limit is lower than that of FX (e.g. 3x), so FX is quite attractive as it allows leverage of 10-20x. However, this is both an advantage and a disadvantage.
With high leverage, there is a risk of losing your positions in the slightest movement of the foreign exchange, so you need to manage your positions carefully.
Of course, the risk is the same as with a foreign currency deposit when you trade for the amount you set, so you can say that it is a good deal for a lower cost.”
4: It is possible to trade from a sell order.
It’s similar to stock investment margin trading, but you can place a buy order if you expect the market to go up from now on, and vice versa, if you expect the market to go down, you can place a sell order.
In other words, you can start with a sell order, which is functional and convenient. Trading from a sell order is called ‘sell high and buy back low,’ so you should order when the market is in a downward trend (a strong yen).
5: Low risk compared to stocks
Compared to trading stocks, forex is characterized by small price movements in the exchange rate. This means that you can keep your risk low.
For example, the value of a stock can jump to 100 million yen in value or vice versa, but since forex trades in currency, it is unlikely that a dollar will turn into 10,000 yen or even 10 yen, since forex is a currency.
6: Information is readily available.
Buying when the yen is strong and selling when the yen is weak is profitable, but the best thing about forex is that the information is easy to get.
There’s so much “strong yen” and “weak yen” in the news, newspapers, and even on the Internet that it’s hard not to see it in the news.
That’s how easy it is to get information about foreign exchange.