It is true that the financial market is unpredictable and risky but that is the same thing that attracts investors. Volatility creates opportunities that can generate profit.
Here are some of the advantages and benefits of forex trading:
Market time
Forex gives you more opportunities to trade because trading operates on a 24-hour market. The market is open at 5 pm EST on a Sunday and closes at 5 pm EST when the market closes in New York.
Learning Forex is Free
There are tons of content where you can learn forex for free including webinars, ebooks, articles, and training courses that can help your trading career. However, please note that trading is easy to learn but mastering the trade is a different story.
Trading Styles
Any trading style can work in forex trading. You can use technical analysis and fundamental analysis to guide you when to enter or exit the market but since each trader is different, the ideal style should be customized based on your needs, goals, and availability.
Low Trading Cost
Forex trading brokers don’t take commissions. This makes it easier for potential traders to create an account.
Risk Management Tools
There are a lot of tools that can help a forex trader. Some of these are demo accounts, setting stop and limit orders, and alert on prices.
Leverage
Forex trading allows you to enter a large trade with the use of leverage. This is one of the advantages of forex trading. Brokers offer traders access to their funds to enter a large trade position. This increases your profit potential but should be considered very carefully since it also increases your risks.
Liquidity
The forex market is considered to be the most liquid financial market which means trades can happen without affecting the overall price and manipulation is very difficult. Liquidity keeps the price relatively stable.
Capital Cost
Trading in the forex market doesn’t require a large capital. Some brokers offer as little as $10 to open an account and even offer starting bonuses when you first deposit and start trading.
Less overnight gaps
Gaps are the break between trading market hours. Since the forex market is open 24 hours a week, there is less gap in the market. This opens up various trading strategies that you can’t do in stocks.
No central exchange
Forex trading is not controlled by any centralized body. This means investors can easily trade even without a main physical structure in place. It also gives trades more control over their investments.
Not directly connected with stocks
This simply means that if the stock market crashes, it doesn’t mean that the forex market will crash too. However, it is possible that the stock market crashes and is followed by currencies crashing too.
Access the forex market anywhere
The internet boom has made the forex market very accessible to a lot of traders. You can trade anywhere using your computer or mobile phone paired with a good internet connection.
