In the last fifteen years, the ways and means of trading have evolved to a great extent and today almost everyone can trade online. It is true that trading online is not suitable for everyone. Therefore, one needs to be very careful before entering into the trade. When you consider becoming a trader, you should think of different markets. It is better you ask yourself what market you should choose. You may think of currency trading, options trading, energy trading, stocks trading or future trading. Though every market has its own attraction, the advantages of the foreign exchange market, or the FX market is above all.
The foreign exchange market is an online trading platform, and is considered to be the largest financial market in the world because of its liquidity and volatility. Every day, almost 5 trillion dollars are traded in this market on a regular basis. If you are new to trading and confused to choose which trading market is appropriate for you, you can think of forex trading as it offers you a number of benefits. Some of them are discussed below.
Advantage of trading in the forex market:
1. Easily Accessible:
In terms of forex trading, accessibility is a great advantage. You can start trading in the forex market with a relatively small amount of money. For an instance, in order to trade in the stocks, you need to invest around 10,000 dollar; whereas, on the other hand, you can start a trade in the forex market by investing as small capital as 100 dollar. This is one of the most important benefits for the small size traders.
2. Extremely Liquid:
FX market is the largest market in the world in terms of liquidity and daily turnover. This is because of the reason that it is extremely large and there is a constant supply of and demand for money. This market is a round-the-clock market, which means the forex market is open for 24 hours a day, and 5 days in a week. Hence, you don't need to adjust your schedule according to the market trading hours. You can trade all day long, or the time you prefer. In fact you can trade with ease under normal market conditions, as there is a constant supply of money in the FX market.
3. Advanced technology is Used:
In the foreign exchange trading, the latest technology and software is used, which is greatly beneficial for the traders. In terms of the other currency markets like future, option and stock, the brokers offer platforms that are backdated (developed years ago). On the contrary, the forex brokers offer trading platforms that are developed with the latest technology. Icing on the top is there are a number of third party software suppliers like CornerTrader who offer you useful trading extensions. They also provide leading forex trading platform like MetaTrader4 and MetaTrader 5.
4. Advantage of Leverage:
In terms of trading, your trade size depends on the amount of your capital. Leverage plays a crucial role in the forex trading, as by using leverage, the traders can purchase or sell up to 500 times more funds than you actually have. Hence, by employing leverage, you can gain more profits (or losses) without having a large amount of money in your fund.
5. The market can never be restricted:
The foreign exchange market is so big and so many participants are there that a single entity even the central bank cannot corner the market and cannot control the market price for an extended period of time. This market is larger than the future, option or stock market. In fact this is the largest financial global market.
Above discussed points are the major advantages of trading in the foreign exchange market. Of course there are more advantages of trading forex, but the above mentioned points are the most vital, especially for the newbies. There are also a number of advantages for the experienced traders as well as the forex brokers. So, kick-start your trading today in the foreign exchange market.