The forex trade market is a large liquefied financial market around the world. The domination by banks and corporations together with the advancements in technology has made it easier for the forex trading market to grow.
There is great trading volume in the forex market, which makes it a hot bet for investors. The benefits of forex trading has also encourages individual traders and companies to join in for a chunk of the profits.
Here are some of the major benefits of forex trading
It is a 24 hour market
The forex trading market is open and continuous all around the world. This worldwide market continues to function as long as it is open all around the world. The trading opens on Sunday evening in Australia and closes on Friday in New York.
There is high liquidity
Generally, liquidity is the ability of an asset to be converted into cash very fast and without any discount in prices. In forex trading, the liquidity is very favourable for the traders. You can move large amounts of money in and out with minimal charges.
The transaction costs are very low
This is a self explanatory statement when it comes to forex trading. The cost of transaction is constant and built into the price in the trading market. The transaction costs are generally referred to as the spread. It is the difference between the buying and selling price of currency in the market.
Free to use leverage
The forex brokers in the market will allows you to make the trades using leverage. Leverage is the ability to trade while the money is still in your account. For instance, you can trade a 4:1 leverage. This means that you trade 40 dollars for ever one dollar you have in your account (or whatever currencies you hold). You could control 400 dollars with only 100dollars in your account.
Forex trading is accessible
You have the freedom to access different platforms from different parts of the world. But this depends on the platform and forex broker and location. You can operate the account for up to 5 days in a week. You can engage in forex trading at the comfort of your home; all you need is a compute and an internet access.
There is volatility in forex market
Movements of currencies in a major part of the market are very volatile. This is due to the profits and exchange in currencies every day. If you have the ability to make a successful speculation on the gain by shifting the prices in the right direction, you will make a large amount in profits.
There are no commissions
Commissions are unacceptable when it comes to forex trading. There are no charges for people who want to build a commission or join a forex trading market group. The traders make the money from setting the spreads. They do this by weighing the trading outcomes before they make a trade.
The final word
Despite all the major risks, forex trading has a potential to be very successful. If you are careful, you can make a major profit easily and fast.