Foreign Exchange Trading, commonly known as forex trading (FX), is the business of buying and selling currencies and commodities to make earnings. FX is conducted all over the world, with the wide range markets located in different countries of the world including New York, London, Tokyo and Hong Kong.
If you are interested in FX trading and planning to invest in it you are at right place, this article by Forexlancer will help you to understand its main benefits and make a profitable decision. Following are the key benefits of forex trading:
Large and Global Market
This market has a sheer size and scale which makes it at the top of the list of the financial markets. 4 trillion USD is the average per day exchanged by the traders in all corners of the world.
24 Hours Trade a Day
The FX markets are not bound to opening and ending hours. During 5 days of a week FX markets are open 24 hours a day. As long as the market opens somewhere in the world, one can trade.
Low Transaction Costs
Beside other financial markets forex markets requires a small amount capital for entry with low cost transaction opportunities.
Among all the appealing reasons to trade forex, the availability of leverage is the most attractive one. The FX brokers allow traders to deposit low amount in the market and borrow high amount against this order to control the higher risk. The leverage can be defined as ratio i.e 1:30 or 1:40 commonly. With the leverage of 1:30 trader can trade up to $30 for every $1 capital in his account.
High Liquidity Market
Liquidity is a feature in FX market. In which, an individual or firm can quickly purchase or sell an asset at stable prices.
Forex Market Variability
There are a huge number of external factors which influence FX market. Before opening a trade these things must be understood like economic stability of a country, global economy, political news, events, policies and trade deals.
Variety Trading Styles
In this type of business activity, traders have a lot of business plans and strategies. They can use a wide range of different FX trading styles depending on amount of time, effort and ending goals.
Despite not having a central exchange system, this trading system is completely secure so that traders do not face any kind of fraud or loss. The country-wise independent consumer watchdogs ensure that brokers are licensed and regulated to protect interests of FX traders.