What are the advantages of forex trading?
Forex trading is a 24-Hours high liquidity market that can be traded with small start-up capital, small transaction costs where no single institutional trader can control market prices.
If you are an experienced trader then, Forex trading is the one for you. It is an option that is available in the world market for you. It is highly lucrative, and you can have many benefits in everyday life of it. But believe me, you can have all the benefits of Forex trading if only and only if you are experienced in it. Otherwise, it might not be your choice of work. But having learned the little nuances of it, you can reap high profits.
Advantages of forex trading are:
- Working Hours – The first best thing about this trading is that you can work at any time of the day. It is an option that is available 24 hours a day. You can take a weekend break as well, as the market is closed for the weekend days. The working time of the market is from 5 pm on Sundays EST. The trading begins in the US and ends when the major trading market is closed by Friday 5 PM EST. There are no huge gaps in trading because the market doesn’t work only on weekends.
- High Liquidity – Liquidity is the major benefit of Forex Trading as this is like the capacity of an asset to convert into cash. So when it is said that your trade has high liquidity, then it means that you can make huge amounts of cash, or you can have large amounts to trade with that particular day. This also will be within the small spreads. Trillion dollars flow every day in the forex market. There is no single institutional trader that can control market prices.
- Small Transaction Costs – These spreads are an important term in trading as it the difference between the bid amount that you might fix and the amount that the potential selling people might actually offer. This spread will actually be the payment for the people who are involved in this trading. So, the transaction costs generally are small when we compare them with stock transaction costs.
- High leverage – You can see that the brokers who are into these Forex trading usually let the sellers and buyers in the market use a fair amount of leverage. Leverage can be up to 1:1000. This is the one that gives them the ability to trade with elevated amounts than what they actually possess in their accounts. So, this leverage is the one that actually allows you to control trade with a lesser capital than what you actually have.
- Clear Rising and Falling Prices cycles – Another advantage of involving yourself in Forex Trading is that you can benefit when the prices rise or fall. Both these factors can be suitable for you depending on how you use these. If you see a currency pair that will boost in price, you can buy it or vice-versa. These are the benefits over the stock market and Forex Trading.
- Small start-up capital: Traders can trade in the forex market with small start-up capital. You can start at $500. In the stocks market, traders very often need to start from $25000.
Again, here is a gentle reminder, this Forex Trading is not for inexperienced traders. You might not profit the same as what others are doing in the same field.