There are many great benefits to take advantage of when trading Forex. Here are just a few of the many reasons more and more people are choosing to learn Forex.
No middle man
The great thing about spot currency trading is that it eliminates the middle man, allowing you to trade directly with the market which is responsible for prices on particular currency pairs. Trading orders can be sent directly to individual liquidity providers, removing intermediaries and ensuring minimal execution times.
No fixed lot size
If you’re using spot Forex, you can determine your position size, or lot. You can participate with minimum trade sizes of 0.01 lots (1,000) via deposits as little as 100/GBP/USD/EUR/CHF.
Lower Transaction Costs
Your retail transaction cost is generally under 0.1 per cent under typical market conditions. With larger dealers, spread could be as little as 0.07 per cent.
You don’t have to wait around for that all-important opening bell; the Forex market doesn’t sleep.
No one can corner the market
Because the foreign exchange market is so large, with so many participants, no single entity is able to control the market prices for long.
Leverage – Trading on Margin
When it comes to Forex trading, small deposits can amount to a much bigger total contract value; this is called leverage, and allows for the opportunity to make good profits while taking minimal risks. It is a bit of a double-edged sword, though, as this degree of leverage can also lead to considerable losses, which is why risk management is important.
Because the Forex market is massive, it is also very liquid; translating to the fact that under normal market conditions, you can easily make instant buying and selling decisions and you’ll rarely ever be stuck in a trade. If you wish, you can even set your online trading platform to close your position automatically once you’ve achieved your desired profit level, or if a trade it going against you (this is called a ‘stop loss order’).
Low Barriers to Entry
You can start trading with Forex on a deposit of 100 EUR, so when comparing with trading stocks, futures or options, it’s one of the best solutions if you don’t want to invest too much money at once. It also makes Forex one of the most accessible ways to trade for those who don’t have a lot of start-up trading capital.
Free Demo Accounts
Many Forex websites offer free Fx demo accounts to help you get started. With a demo account you can practice trading and build up your knowledge and skills without any risk. Not only that but if you sign up, you can also access plenty of free material such as trading platform guides, video tutorials and daily market analysis. It’s a great way to the best start if you’re new to the world of Forex and don’t want to risk real money right away, so why not sharpen your skills and learn Forex today?
I am a copywriter and poet with a bachelor’s degree in English Language and Creative Writing. I have worked in various marketing & creative roles since 2001. My aim is to publish at least one novel before I die – so far I have had 2 poems published internationally in print as well as some online. In my professional capacity I currently work for an advertising agency in London.