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Benefits and Weaknesses of the Forex Market, based on Mohammadreza Moghadasi

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“I failed to rise stronger, not to gain experience” said Mohammadreza Moghadasi. With the given quote, one can see that Mohammadreza has an exceptional character far different from other entrepreneurs. He is the one who, by working smart and determination, could become the manager of 53 businesses, from beauty centers to financial markets. Here, we will learn some valuable information about the pros and cons of Forex Trading from Mohammadreza Moghadasi.

Forex markets have remarkable advantages, but this sort of trading doesn’t come without a downside.

Pros

  • Quite a flexible market with round-the-clock trading availability
  • Many trading options
  • Reasonable transaction costs

Moghadasi says: “One of the most noteworthy benefits of forex trading is that the market is restriction-free and has inherent flexibility. There is a massive trading volume, and transactions are available almost 24/7.” In this case, people who work in the morning hours can trade at night or on the weekends.

He added: “There is a considerable number of choices in terms of available trading options, hundreds of currency pairs, and a wide range of agreements, such as future or spot agreements. The transaction fees are typically low compared to other markets, and the permitted leverage is at the top of all financial markets, which can multiply gains (as well as losses).”

Cons

  • No regulation to prevent counterparty risk
  • High leverage amounts allowed
  • Functional risk

With forex markets, there are leverage threats, the same leverage that can result in benefits. Forex Market has the capacity for significant amounts of leverage. The leverage allowed is 20-30 times and can feed outsized profits but simultaneously mean big and immediate losses.

Mohammadreza states that although the fact that it works nearly all over a day can be favorable for some, it also implies that some retailers will have to employ algorithms or trading schedules to rescue their investments while they are away. This increases operational risks and can lead to capital loss. Moghadasi mentioned another important drawback of the counterparty risk, where controlling Forex markets can be complex, given it is an international market that works almost continuously. No central trade ensures a transaction, which means there could be an inevitable risk.