The first thing that one should ask before becoming a trader is what market to go for. A lot of things are involved including stocks, energies, options, futures or currencies. Every market has its own appealing features as well as risks, but Forex emerges as one of the winners, owing to a number of striking advantages it offers. Get to know why it would be great to take up Forex trading seriously.
1. High Liquidity
The capability of an asset to be turned into cash rapidly without involving any kind of price discount is called liquidity. The Forex market shows high liquidity which implies that a large sum of money can be moved into and out of foreign currency, without experiencing any large price movement.
2. All Time Market
The Forex market has spread itself across the globe. Trading occurs on a continual basis since there is more or less one or more markets open worldwide at a given point of time. Trading begins with the opening of the market on Sunday evening in Australia and finishes off with the closing of the market on Friday in New York. To get the best results, your trading time must be adjusted in such a manner that you trade in an active market.
This refers to the process of trading more money in the market compared to the actual amount present in the trader’s account. In the Forex market, brokers make room for traders to use leverage while trading.
For instance, if the market allows you to trade at 50:1 leverage, it indicates that for every single buck you have in your account, you can trade 50 bucks. This, in turn, implies that with $1000 worth of capital, a trade of $50,000 can be controlled. Allowing trade with a considerably small amount of capital is one of the most striking benefits of Forex.
4. Potential for Profit against Rising and Falling Prices
In the case of the Forex market, directional trading has no restrictions. So, if you think that the value of a currency pair would be increasing, you can purchase the same, or go long. In a similar manner, once you feel that the value could decrease, you can sell the currency pair, or go short.
5. Unrestricted Demo Account
Contrary to what several other financial service providers offer, Forex brokers allow you to preview their services. You can even evaluate your trading knowledge with the help of a practice account or demo account. This, in turn, makes it possible to trade paper money as you properly grasp the real market conditions.
The most interesting thing about having a demo account is that there are absolutely no restrictions for this account. Trading can be done here as long as you want to.
6. Bonuses and Loyalty Programs
Financial institutions other than those involved in Forex trading are in fact quite costly service providers. With them, you get non-negotiable trading conditions and almost no reward as a client. When you work with Forex brokers, there is always a dedicated account manager to provide you with due assistance.
Also, you are treated to lucrative loyalty programs, which almost compensates for the transactions that you indulge in. Then there are bonus offers by some brokers through which you can obtain higher trading capital, as you move forward to achieve higher volumes.
Something that comes with such a wonderful bouquet of advantages cannot be without risks, and this same principle also holds true for Forex. Being the largest global financial market, Forex can experience high volatility. This is a good thing, but can result in losses, when there is also high leverage. So, carefully seek expert advice and you will surely reap the benefits of trading in this market.