There are tons of advantages to trading Forex, I’d like to share some with you.
- 24-hour trading market. From 5 PM EST on Sunday evenings to 5 PM EST Friday evenings, the Forex markets are open. There’s no waiting for any opening bells or anything of the sort, for 5 full days, the market never sleeps. This presents great opportunities for those who trade on a part-time basis because you can pick when you want trade, whether it be morning, noon, or night.
- No middlemen. Forex trading eliminates the middlemen. This allows you to trade directly with the market responsible for the pricing on a particular currency pair.
- Minimal transaction costs. These transactions are usually referred to as the bid-ask spread, and is calculated by subtracting the difference of the bid price from the ask price. The cost of these retail transactions(spread) can be as low as 1 pip!
- Leverage. In Forex, a small initial deposit can be used to control a considerably larger investment. This is used so the investor will be able to gain a high profit yet at the same time, keep risk capital to a minimum. Example: a Forex broker offers 100:1 leverage which means that with $100, an investor is able to buy or sell $10,000 worth of currencies. Please be aware of the fact that leverage is indeed a double-edged sword which not only allows for big gains but also huge loss. This is where applying proper money management skills is highly recommended.
- High Liquidity. Due to the high levels of trading activity in the Forex markets, it is considered extremely liquid. This means that currencies can be bought or sold quite easily without affecting the price of the a particular currency. The foreign exchange market is known as the most liquid of all financial markets due to a volume of over 1.9 trillion dollars traded daily. This makes it impossible for one person to influence the market’s exchange rates under any circumstances.
- NO Bear market. There is never a bear market in Forex, investors can make profits whether the markets are rising or falling.
- FREE Demo accounts, Charts, and Analysis. Many Forex brokers offer FREE ‘demo’ accounts and charting programs so you can practice your trading skills before opening a ‘live’ account and risk real capital. These services are very valuable to those who want a feel of the market before entering into the real trading world.
Those are 7 of the most important and worthwhile reasons for trading Forex. Here are 3 other reasons that you might find pretty neat :D:
- Trade from anywhere in the world. Imagine being able to go on vacation, taking your laptop with you and being to trade from where you are, provided you have an internet connection, of course. There are no restrictions on where and when you can trade. Isn’t that awesome?
- Open and close your business whenever you want. There may be a time where an opportunity comes along where you may need to focus completely on it and won’t be able to trade for a period of time. No worries, Forex isn’t going anywhere, you can albe to pick up right where you left off, anytime you want.
- YOU ARE YOUR OWN BOSS. Isn’t this the best reason of them all? No cranky supervisors bossing you around, no quotas to fill, no risk of being fired(no pink slips, hurrah!)…you have complete control over your financial present and future. SCORE!