A staggering growth of trading opportunities has been recorded over the past two decades, with financial markets taking the centre stage and becoming more and more accessible.
The Foreign Exchange – or forex – market, in particular, is the largest and the most actively traded market in the world at present. It has allowed people to capitalise on the movements in currencies and in turn, make significant amounts of money in only a short span of time.
The consistent rise in forex trading has largely come from the many advantages the market has to offer to its participants. As such, it has become a favoured market of choice for both novice and pros alike.
There are six different benefits below, which provide further evidence and strength to the argument of why you should consider investing in the forex market.
Flexibility
The forex market is alive and running for 24 hours – it never sleeps. You can easily trade whatever you want, whenever you please as the market does not dictate this.
There is no need to wait for the opening of the bell or having to scramble around in order to get your order executed before the daily close.
Trading normally begins with the opening of the Sydney session and tends to close with the New York session. However, by this time, it has started all over again.
This essentially means that as a trader you can be as active or passive as you please and trade on your own schedule, regardless of the time of day, rather than having to follow the one dictated by the market.
Low Transaction Costs
Not only does the forex market require minimal capital for passage but you can also benefit from low transaction costs once you're in.
Most retail brokers earn their revenue or commission through the spread which is essentially the difference between both the bid price and ask price. This is also the retail transaction cost.
Highly capitalised brokers may offer traders very competitive spreads which could result in minimum trading and transaction costs allowing for maximisation of profits.
Risk-Free Demo Accounts
Many trading platforms offer their users the choice of a free forex demo account in order to practise forex trading as well as learn the ropes.
The demo account works with live date, but the only difference here is that you're using play money instead of real money.
Demo accounts are an essential tool for novice traders and great for those that would like to test the waters or improve their skills in the real market without having to actually risk any capital.
Higher Liquidity
Liquidity defines how quickly an asset may be converted into cash. The foreign exchange market is vast and enormous which essentially means that large volumes are being traded at any given moment.
With such large volumes going in and out of the market, you will be able to trade whenever you like.
With just a click, you can quite easily buy or sell any currency you want as there will always be someone on the other end that is willing to trade back.
Availability Of Brokers
Forex brokers provide relevant knowledge and guidance and help traders in avoiding mistakes that could result in huge losses.
Owing to the demand for forex trading, a plethora of broker agencies and platforms can be found or accessed no matter where you reside.
A number of professional forex brokers are available in various parts of Africa and its islands as well like Seychelles Forex Brokers.
Leverage
With leverage, a trader can borrow money from their broker, which allows them to trade in excess of the funds that have been actually deposited.
This is perhaps one of the most attractive features of forex trading. Foreign exchange markets provide the most leverage among all financial asset markets at present.
There are arrangements in the forex markets that provide traders to lever their original deposit by as many as 20 times and then trade in the market.
Warning: The past performance of any investment is not necessarily a guide to future performance. The value of investments or income from them may go down as well as up.
