✅ Advantages of Forex trading

✅ Advantages Of Forex Trading

Forex trading is very different from trading stocks or shares. The unreliable nature of the stock markets means that many traders are now moving to trade the forex market. Many have seen that the advantages of trading the forex market far outweigh those of the stock or equity markets. In this article, I will go through some of the advantages of Forex Trading.

24 hours a day, 5 days a week

The forex market is, in its truest sense, a 24-hour market, open Monday through Friday. The market starts with the opening in Sydney, moving on to Tokyo, London and finally New York. There are always traders trading the market every minute of every session. The nature of the forex market means that traders can react to breaking news and place their trades accordingly.

Electronic Communications Networks or ECN’s are relatively new products that have revolutionized after-hours trading. While many of these ECNs have low liquidity and are poorly managed, meaning that there is no guarantee that any trades you make will be executed, some are regulated and provide a reliable and reliable service to traders.

Liquidity – A matter of trillions

The forex market is bigger than the stock market, although many people who don’t trade find this fact hard to believe. A survey conducted by the Bank for International Settlements (BIS) in 2007 found that the average daily trading volume for the Forex market reached $3.2 trillion USD, marking an all-time high at that time for the forex market, this can be compared the other survey in 2004 that saw trade at $1.9 trillion, an increase of 71%!

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This sharp rise can be attributed to retail investors using the many forex brokers that are now available online. To put it in perspective, that figure is more than all the stock markets in the world put together! This amount ensures that the price remains quite stable and therefore ensures the liquidity of the forex market, making it easier for forex traders to open or close their positions.

Bulls or Bears? Why not be both?

The stock market generally refers to the decline of a stock as a bear market and a bull market as a bull. These terms don’t exactly exist in the forex market in the truest sense of their meaning. Forex traders can profit in a bull market or a bear market, regardless of how major economies perform, as rates fluctuate continuously.

The simple things….

As the forex market does not have the many thousands of options that the stock market does, many major currencies are not traded on the forex market. This means forex traders learn the predictable movements of the currency pairs they trade and gain a better understanding of price movement and patterns.

Start small, aim high

With the popularity of the forex market increasing among retail investors, it is now possible to open a forex trading account with less than $300. Some brokers may accept a smaller amount, but I would recommend reading our Top 10 Forex Brokers article for the best ones. we found. As the forex market is leveraged it is possible to turn this amount into thousands of pounds, however it is also possible to lose it if you do not have the right forex trading strategy.

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It is still possible to get 100:1 leverage from some online Forex brokers that far exceeds the 2:1 margin that is commonly offered by stock brokers. This increased leverage allows forex traders to maximize the potential profit from every trade they place. Although, again, a forex trader would do well to remember that leverage will also greatly increase your potential losses. The need for an effective money management strategy to minimize risk is a must for any professional forex trader.

Try before you buy

Almost exclusively unique to the forex market is a feature of most trading platforms called a demo account. This demo account will allow you to trade any strategy you like, ensuring you are confident about what you are doing before putting any money on the line. This demo account will allow you to trade in ‘real time’ at the exact market price, which will ensure that you have a chance to gain experience in the forex market before opening a real account.

These are just some of the reasons why traders are moving in droves to the forex market. Some stay, others don’t, it’s the ones who do the research that last longer.

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