Forex is an incredibly liquid global market of currency trading. It is a unique market, which presents itself as an opportunity for millions of traders daily to trade and make money. Forex trading is devoid of any stringent regulations and enjoy high leverages; it is also open to all investors across the world. With such amazing features, it is no wonder that traders are attracted to this market. It is a decentralized market open to all the traders worldwide. Anyone, with limited investment, can deal in forex without much ado.
So, what are the benefits that are enjoyed by the forex market that traders can look to tap into?
- Enjoys high liquidity
The Forex market is the biggest in the world and experiences a trading volume of $5 trillion each day. This makes it bigger than all of the trading markets in the world combined and 53 times bigger than the New York stock exchange. This gives you an instant access to money and allows you to sell your investment quickly, and drastically reduces the chances of you getting duped.
- Flexible times
You can trade round the clock. Since the forex market is a global market because we trade foreign currency on it, it allows you to trade anytime, anywhere. As long as there is market open somewhere in the world, you can trade forex.
- It is devoid of any commissions
The financial market of forex does not have any clearing, government, or exchange fees or even brokerage fees. Hence, anyone with any investment can trade here. It also eliminates the need for middlemen, as you can directly trade with the market that features your preferred currency pair.
Forex trading allows you to have larger leverages. It means that you get the ability to control a larger contract value. It allows you to make nice profits, and also keep a check on your risk capital. Forex currency exchange depends on the exchange rates, and you can trade with any margin deposit. While this aspect opens up a whole new world of trading, it also exposes traders to the risks. But if you do a proper risk management, it can be avoided.
- Low entry barriers
With as little as $25 as investment, you can start forex trading. There are various options such as mino and micro, that require low initial investments. Now, opening an account with bare minimum may not be beneficial in terms of its rewards, but it does make the market quite accessible. In fact, dabbling in the forex market with minimum investment is a great way to familiarize yourself with its nuances. Your fear of losing would reduce substantially, and you would be able to understand its tips and tricks.
- Market prices cannot be controlled
The forex market is capitalism in its truest sense. It is so huge and decentralized that no single entity can hold or control the market price for long and extended periods of time. Hence it is free and accessible to all. No analysts, hedge funds, banks, can influence the markets for a long period of time. This is something that we cannot say of stocks. Stocks can easily be influenced by rich influential entities and top guns. Forex has space for everyone. It is a fair market.
- Profit from rising and falling prices
When you enter the forex market, your chances of earning profits increase by a considerable number. The market has no restrictions whatsoever when it comes to directional trading. If you think that the currency pair in your possession is going to decrease in value, you can sell it off. If you think that its value is going to increase, you can buy it or go long. Forex offers you an attractive, and most importantly continuous profit potential. The market is all about buying a currency and selling another one, and you can go long or short according to your preferences.
- You can choose your unique trading style
Since it is an open, 24/5 functional market with hardly any restrictions, you can choose when and how to trade. You can be an intraday trader where you can hold your position for a short period of time during a day, i.e for a few minutes to hours, and usually enter and close your trades during the same day. Or, you can become an overnight trader and expand your horizon to days, week, or even months. Forex allows you the flexibility. The forex is always within your reach and your comfort zone. You do not have to leave your workplace or your home to trade. You can do it from any device, anywhere.
Forex trading has immense benefits. The points mentioned above have just scratched the surface. The world of forex is huge, and the obvious advantage of high leverages, low entry costs, and good flexibility that it offers attracts traders to it everyday. No wonder its impact remains untouched till now.