Reasons Why Forex Trading is a Lucrative Business

Written by
Business

Trading forex refers to the buying and selling of currencies to gain a profit. Forex is one of the most traded financial markets in the world where transactions of trillions of dollars taking place regularly.

According to Ido Fishman, when you know which markets to trade, you are looking for the best trading conditions and excellent chances of gaining a profit. Many reasons why traders think that forex trading best fits these criteria include the following:

  1. Largest Financial Market 

The forex market has been the world’s largest financial market for many years and it is not difficult to see how this market has ceded this title in global trading. Averagely, forex market witnesses between $4 and $5 trillion being traded every day. It has all sorts of trades participating from all over the world, making the forex market the most accessible trading market.

  1. Accessible for Everyone 

Trading forex doesn’t necessarily mean to trade with big shots. You do not need to invest lots of money to start as a forex trader. You can even access a forex trading account with only a $500 deposit. It, however, doesn’t mean that you will become a good trader immediately. Remember, doing well in forex trading takes time and needs you to learn the market and become successful. Make sure you move slowly and trade wisely to get desirable results.

  1. High Liquidity

The factor of high liquidity makes the forex market huge. It has a large volume of trades taking place every moment under normal market conditions. You can buy and sell with a click of a mouse button when you want because someone will always be on the other side willing to trade back. Many trading platforms also allow you to automate your trading. While the market has quiet hours, you will always find trades to be made, especially if trades encircle around majors like USD or EUR.

  1. A 24-hour Market 

Forex trading can be done 24 hours and five days a week. It means you can trade at any time and from anywhere. You do not need to wait for the scrambling or opening bell to let your order execute before day-to-day trading closes. Just trade on your schedule whether its morning, night, or noon.

  1. Leverage 

When it comes to forex trading, your small deposit can go a long way. The leverage factor in your trading account allows you to borrow money from your brokers and trade with your actual deposited funds. This is one of the most powerful and most attractive features of forex trading. Equity gives you up to 1:500 leverage and increases your purchasing power to promise larger gains though it does include risk too.

  1. Risk-free Demo Account 

The freedom of using a free demo account is the best part of forex trading. It allows you to practice forex trading and learn the nuts and bolts of the market without even risking real money. Using a demo account is like trading in a real forex market but with play money. This option works best for those who want to test the market environment or improve their trading expertise in real market conditions. You can do it without paying any money and without making any commitment. If you are a beginner, give it a try and reap the benefits of forex trading.

  1. No Commissions on Most Accounts 

Forex trading has no or minimal commissions for large volume trading transactions. You do not need to pay any clearing, exchange fees, or commissions on trading accounts and accounts with spreads. The forex market enables you to make money using the “spread” .i.e. the basic difference between ask price and the bid. Remember, spreads in currency trading are usually very light and make forex trading one of the most cost-effective investment tools to utilize the most.

  1. Trading in All Market Conditions

Forex trading can be done whether or not the market goes high or low. Several strategies help you make the most out of trading in any market condition. You can trade whenever you believe is the right time to make a transaction. It could either be the price of a currency pair is going up or dropping down. Surprisingly, many traders like Ido Fishman grow well even in highly volatile times. While sudden price changes carry more risk, they can be gainful if utilized properly and timely.

High liquidity in the forex market means there are lots of buyers and sellers willing to make a trade at whatever time suits them the best. Everyday individuals, banks, and companies covert over 5 trillion dollars of currency in the forex market to generate a profit.

Article Categories:
Finance