What are spreads?
The Forex market is becoming one of the most popular markets for trading. Not only experiences traders, but also beginners are considering this market as an opportunity to maximize their income ever more frequently. Individual investors and traders are flocking to this market in order to trade just as they do with futures and stocks.
More and more individual traders are seeing more than a simple method to diversify their investment portfolio in Forex, and actually begin to consider it as one of the best and most lucrative component of their investment toolsets.
This is constantly happening, because Forex possesses a variety of advantages in comparison to other markets, stock, commodity or futures. Here are some of the things that you would commonly hear in FX commercials:
- Unprecedented liquidity. Forex is the largest financial market in the world at this moment. Everyday turnover is over 2 trillion US Dollars.
- Great potential for leverage. Private investors have access to a variety of leverage options reaching as high as 500:1.
- Lack of commissions (more on this later)
- Low trading expenditures
And yes, all of those are actually true.