Why Trade Forex?
Forex (or foreign exchange) market is a huge international market dedicated to trading currencies. It includes millions of people, hundreds of thousands of trades every day and with an average daily turnover amounting to 4 trillion USD it is also the most traded financial market in the world. When you have such a huge market, you will naturally have a lot of opportunities offered to you if you decide to conduct some trades yourself. Forex has some very noticeable advantages when compared to other types of trading and this will be the topic of our article. If you want to know why exactly trading forex is a pretty good idea, just keep on reading.
Why Trade Forex? | Market’s Size
As we have already said, forex is the largest financial market in the world. This fact entails some advantages you as a trader have from the very beginning of your trading career. For instance, since this kind of trade is global, that means you always a market open somewhere in the world. You can count on an active market 24 hours a day, five days a week because there are no set exchange hours. From London to Tokyo, from New York to New Delhi, somebody is always trading and this brings us to another advantage connected to the market’s size – liquidity.
Now, because so many people are trading constantly and the daily average amount traded goes up to 4 trillion dollars, the liquidity is extremely high. In other words, you will never have to wait a lot for someone to take you up on your offer and you can always count on any kind of business to be concluded quickly and efficiently. Another advantage of a very liquid market means that the prices of the most dominant assets are very stable. Nobody can manipulate them precisely because there are so many people who don’t want any surprises and keep the prices real and fair.
The size of the market also enables you to invest easily in a foreign country, without any problems regarding foreign security laws or unclear financial statements written in some foreign language. Everything is laid out, there are no uncertainties and the whole deal goes down very quickly. This is a great way to gain exposure in other countries or to simply find some good investment opportunities abroad.
Why Trade Forex? | Low Costs
This really depends on the broker, but the more serious ones will never demand from you some large commissions or initial deposits because their competition would walk all over them. You usually need to pay only the spread which can, in some cases, be lower than 0,01%. As for the minimum initial investments, they can be as low as $25. Demo accounts are usually free, as well, so you can practice your forex trading as much as you like. In a way, all of these benefits can again be linked to size of the forex market because it is the size of competition which keeps the prices in check. Every serious broker needs to invest a lot of effort just to survive on the market which results in some great deals for traders such as yourself. The trading is very accessible to anyone interested and the brokers are always happy to take in a new client.
Why Trade Forex? | Making Profit
Many of the enumerated features are what attracts traders from around the world to this type of trading because they promise profit on almost regular basis. Because the prices are pretty stable, people can plan a lot of things ahead. Predictions become much more accurate than, for example, those made on a stock market and the whole business is much less stressful because of it. True, the possibilities for unexpected huge earnings are also much rarer, but in the long run, this means much more profit because fewer shocks can come your way. Types of trading that offer this kind of security are extremely hard to find and all experienced traders appreciate it immensely. All of this means that patience is a necessary virtue in this business. You simply cannot hope for a quick buck just because you had a bit of dumb luck. However, with this type of trading, you can be sure your patience will eventually pay off handsomely.
One of the key factors in making all of that possible is the leverage system implemented in this type of trading. Because of it, traders can control an exponentially larger amount of currencies, depending on how big the leverage offered by their broker is. This increases profits significantly and provides more options to the traders when they want to invest on the market.
Why Trade Forex? | Conclusion
Forex trading is certainly a very popular type of trading which is conducted all over the world at almost any imaginable time, five days a week. It is the largest financial market in the world and its size allows it to offer some very unique possibilities to the traders. The prices are very firm, unpleasant surprises are very rare, liquidity is exceptional and bigger investors can easily make their presence known in foreign countries with no administrative problems at all. This kind of trading is very accessible to all traders because brokers usually do not demand any fees or high commissions and the minimum deposits are very reasonable, as well. The only thing you will need, however, is patience. Since the prices are stable, it may take some time for the profits to start rolling in, but it is definitely worth the wait as this can eventually become a reliable source of income for you. With the markets being open 24 hours a day, you can take your time and conduct trades whenever you want. Whether you are still a rookie or a professional trader, forex is certainly a great choice for a safe investment.