Why Trade Forex?
The Forex market is fast becoming the most attractive and popular market in the world. The traditional stock is no longer relevant and traders are moving fast into the Forex. We collected here a few reasons to show you why this is happening and what advantages the Forex market has to make is so popular.
How is trading Forex an advantage?
We choose to focus on a few very important advantages of the Forex trading and the reasons that people choose this market:
This is the largest financial market in the world
The daily volume of the Forex market is huge – over $3 trillion per day! This makes the stability of the market very good compare to stock trading. Also, the price in the Forex market is exactly what you see is what you get and you can follow it very easily.
Forex trading simplifies everything, there’s no clearing fees, no exchange fees, no government fees, no brokerage fees, no middlemen. The elimination of the middlemen gets the traders closer to the actual trade and makes the traders responsible for their pricing. The brokers are usually paid through a service called “bid-ask spread”.
Low transaction costs
The retail bargain cost in Forex trading is usually less than 0.1%. Sometimes, with larger dealers, the spread could get as low as 0.07%. You can control this with your leverage and we’ll talk more about this later.
The market is opened all day long
The Forex market is open 24 hours a day. Opening on Monday morning (in Australia) and closing in the afternoon in New York. This is great for traders that can trade all day long or in parts. You can choose the times that are convenient for your trading – day, night, when you eat or when you sleep, whenever you want. The Forex market is also huge and controlled by so many members so the prices cannot be controlled by a single entity for a long period of time.
In Forex trading you can minimize the risk by depositing a small amount that will control a larger contract value. This is controlled by leverage and can make you profitable in the Forex market. If a broker gives 50 to 1 leverage it means that with a 50$ deposit you can buy or sell with 2500$. If you put 500$, you can trade with 25,000$. All this needs to be done with great risk management because high leverage can easily lead to great loss, as well as great profit.