The forex market is the largest and most liquid of the financial markets. Daily activity often exceeds $4 trillion USD a day, with over $1.5 trillion of that conducted in the form of spot trading. Aware of advantages or benefits associated with Forex trading. Unlike other financial instrument, there are many benefits and advantages of trading forex. Here bellows are some keys that Forex trading offers:
Non-stop daily trading
The Forex currency market runs every minute of the day. You don’t need to wait for an opening bell to begin at 5 p.m. ET to 5 p.m. ET on Friday. It begins on a Monday morning in Australia to close in the afternoon in New York. The Forex market is always busy. This enable you either trade full time or part time on Forex. You can carry out your trading whenever it is suitable for you.
Due to the fact forex is the biggest trade market in the world it is completely liquid. This means that all things being equal you can buy and sell at any time you wish. The cash forex market has great liquidity available for you all day long compared to other 24-hours market. This means you can carry out any transaction of your choice with very little market impact. You can even set your online trading platform to automatically close deals for once you have gained your desired profit or to close a deal that is not in your favor.
In forex trading a little deposit can have a great impact on a large contract value. Leverage enables a trader to earn more money at a lower risk capital. It gives U.S. participants the opportunity to leverage about 50 times the value of their account on major forex pair while 20 to 1margin for the minor pairs. These leverage amounts might not always be on the table or it might change at any time.
For instance, using only $2,600 with a leverage of 50:1 you might be able to control 100,000 units of euro quoted at $1,3000. Do not forget that as leverage helps you earn money easily it can also cause you a great loss quickly. Leverage amount of up to 400:1 are always available in different currency for international Trade station clients.
Another example, if you make a trading with 1:100 leverage it implies that 100 EUR margin deposit will make it possible to for a trader to buy or sell 10,000 EUR worth of currencies. Also you can make a transaction of with 500 EUR, 50,000 EUR and so on. Leverage can be two sided if it is not well managed it could lead to a great lose.
Middlemen are not needed for spot currency trading. You can make direct transaction with the market that handles pricing on a specific currency pair. To make sure the trading transaction is carried out on time all orders are directly sent to the liquidity provider without middlemen.
The forex market offers special opportunities to trade fundamental changes in economies of different countries alongside technical trading. The changes that occur in the economy of different countries are monitored through the events that happen monthly in these countries. The basic development that happens in these countries has a serious effect on the market during the release of data and brings about long-term trend. The major economic indicators that have an effect on the market are interest rates, employment rate, and GDP.
Cheaper cost of transaction
The retail cost of transaction or the bid is below 0.1% in a normal market condition. But it could also be as low as 0.07& for larger dealers.
No one can monopolize the market
No one can successful control the market price for a long period of time this is because the foreign exchange market has a lot of traders and is too large to be controlled.
Low Barriers to Entry
If you are new in the currency trading market you might be a little worried about the cost, but it actually wouldn’t cost much. When compared to trading stocks, options or futures, it is not a fact. Some trading platforms would provide micro trading accounts for a deposit as low as 100 EUR.
No specific lot size
Some trading platforms do not place a limitation to the size of the lot. You are free to choose your lot or size of position. The trader can transact with a trade size as low as 0.01 lots (1,000) and a little amount of deposit like 100 EUR/ USD/ CHF/ GBP.
Free Trial Account
You will be given a trial account so you can learn the trading techniques and improve your skills in the field. You are also entitled to a lot of free forex educational material which includes daily market analysis, video tutorials and trading platforms guides. It is important to begin with opening a demo account if you are new forex as it would provide you with useful information if you are not financially balanced and would prefer to improve your skills with virtual money before going fully into the trading business.