The stock market can be a great place to build wealth if you know what you’re doing. However, there are people who prefer trading other forms of assets including currencies. With foreign exchange, you enjoy some benefits that are not present when you focus on buying and selling shares. Below are just a few of them:
Zero Commissions
24-Hour Trading
Trading stocks means having to pay for commissions to your broker at every turn. A certain percentage of the trade amount will be deducted from your account. You might also be charged taxes and other government fees. If you are invested in index funds, then the manager of those funds will also get paid. By the time you get your profits, they have been severely depleted by all of the hands in your cookie jar. In Offshore Forex License, you will only need to worry about one thing: the spread. This is the difference between the buy price and the sell price. You keep everything after exchanging your money, much like you would when trying to get your dollars changed into local currency when traveling.
Stock markets are location-dependent. You will need to wait for the New York Stock Exchange to open before you can trade the stocks that are listed there. The same is true for other stocks. In contrast, currencies get traded everywhere at all times. You don’t need to be in Europe or wait for office hours in Germany just to buy and sell euros. It is a more global marketplace. As such, there is always an opportunity wherever you are. If you want to trade large amounts, then you can do so 24 hours, 6 days a week. The action shifts throughout the day as Asian markets can be in the thick of things while the US sleeps and vice versa.
Efficient Market
One big problem with stocks is that they can be easily manipulated. A big player can hoard lots of stocks and dump them randomly. Without warning, the price can plummet to record lows to the detriment of other investors. It is easy for some people to influence the price because of their shares. This is not as big of a problem with currencies especially if you are dealing with a major one. Cornering this market is next to impossible. Central banks have the biggest say but even they can’t exercise control for an extended period or guarantee the results they want.
If you are an experienced trader, you might even want to venture into getting an Offshore Forex License to become a broker. Contact legal experts in your chosen location for more information.
