Forex Trading: What Are the Benefits
Business

Forex Trading: What Are the Benefits

Forex is the largest and dynamically developing market with an enormous daily trading volume. Owing to high liquidity, round-the-clock work, Forex trading has become a popular way to earn money, a growing number of people choose forex as a source of income.

What opportunities and benefits does the Forex market provide?

1. Easy access to trading

The foreign exchange market is not attached to any place, trading is automated. You can trade anywhere, whether at home, at work or on vacation. Traders make deals via special programs – trading terminals. Developers take into account the needs of traders and offer different versions of platforms: desktop, mobile and browser.

Most traders give their preference to the MetaTrader platforms from MetaQuotes Software Corp. The terminal provides traders with the necessary tools for analyzing price movements, allows managing trading accounts, placing pending and market orders etc. Furthermore, the interface is intuitive and user-friendly.

2. Low entry threshold

Earlier the foreign exchange market was available only to large banks and financial institutions, today anyone can trade and earn here. To enter the market, it is not necessary to have hundreds of thousands on the account. You can even start trading with $10. Many brokers offer mini accounts and do not require a minimum deposit. That makes forex trading more accessible to the traders with a small start-up trading capital.

3. Leverage

Forex brokers allow using leverage, which gives the trader the opportunity to enter the market with a small deposit. Leverage works according to the following principle: the broker provides the trader with virtual money, with a certain pledge (margin). After a position is closed, borrowed money is returned to the broker, and the profit or loss is credited to the trader.

Leverage enables trade more money than you have in the account. Leverage is expressed in proportion, for example, 1:100. That is, having a deposit of $100, you can trade $10,000.

Leverage simplifies entry into the Forex market. However, leverage involves risks. It is necessary to properly manage risks and capital starting from the first transactions.

4. Around the clock work

Unlike the stock market, where the trading hours are limited, the foreign exchange market is available 24 hours a day. Trading is conducted from Monday to Friday, except for weekends and holidays. Marketplaces are located in different time zones, thus, when in one country trading is already finished, in another it is just beginning.

For many traders, Forex trading is a way of earning extra money. Full-time employees have the opportunity to choose the most convenient time for themselves, which allows combining trading with the main job.

5. High liquidity

High liquidity is ensured by the fact that there are always market participants on the market. There is always a constant demand, so you can open the position to buy/sell anytime.

6. No additional commission fee

Unlike other markets, there is no additional commission charge on Forex, except for the difference between selling and buying price. It is already taken into account in the price and is called spread. It depends on the characteristics of the currency pair, market volatility, and broker policy. For example, Forex broker JustForex offers low floating spreads on all types of accounts, from 0 points on the ECN Zero accounts.

7. Free practice and education possibilities

On Forex there is an opportunity to practice trading and gain skills on demo accounts. They are absolutely free. Demo accounts are efficient for those who are just starting their acquaintance with Forex before opening a real trading account.

Besides, books and expert articles, online lessons are freely available, everyone can pick up something useful and enrich the knowledge. There are also various go-to resources such as Investopedia which helps to understand Forex, as well as financial portals with news on financial markets, economic calendar with upcoming events, technical analysis, charts and many others.

Forex is free, prices are determined only by supply and demand. This often causes strong trends and allows making a significant profit.