Why Choose Forex Trading?
More and more people are choosing forex trading over other types of careers. Given that it has a high liquidity, 24/7 schedule, and easy accessibility, it’s not surprising to see that it has become a lucrative market. Currency pairs beat other securities in many ways and it’s much easier to make money using, well, money pairs.
We’ll help you answer that.
The following are the answers that will let you wrap your head around forex trading.
Answer 1: Low Cost
Trading forex does not require you to pay separate brokerage charges or commissions. As a rule, brokerages only earn from the spreads between forex currencies. That means more funds for the actual trading. Other securities are already expensive, and then you still have to shoulder other fees associated with trading them. Forex trading does not sport that kind of problem.
Answer 2: Very High Liquidity
The forex market has the highest number of market participants, and this provides the highest level of liquidity. That means large orders of trades are filled quickly without large price changes. This prevents price manipulations and anomalies. That’s one of its biggest edges over other markets. You’ll also find it easy to spot similar price patterns throughout the non-stop trading.
Answer 3: No Central Exchange
You can do forex trading over the counter—it’s deregulated. It has no central regulator and no central exchange. Why’s this good for you? This lets you avoid sudden surprises, although there are very rare instances where central banks interfere as needed.Moreover, there are no insiders in the forex market, so there’s almost zero chance of insider trading.
Answer 4: Various Pairs to Trade
There are as many as 28 major currency pairs in the forex market, including the 8 major currencies. You won’t have zero options. Think about timing, volatility patterns, or economic developments in the respective countries of each currency. Oh, one more thing: you can switch from one currency pair to another with very minimal fuss.
Answer 5: Low Capital Required
You don’t need to be a millionaire to start forex trading, thanks to tight spreads in terms of pips. Compared to other securities like equity, futures, or options, forex trading requires smaller initial capital. It’s also very advisable to try margin trading with high leverage factors, although those things may entail risks.
Answer 6: Ease of Use
Once you try trading, you’ll have to be familiar with different technical indicators for short-term trades and fundamental analysis theories for long-term trades. In other words, you can beat the market even if you’re just a beginner by just using those indicators and learning those fundamentals. It’s possible for a young gun to beat old dogs using new tricks!
That’s just 6 of the countless advantages of forex trading. Nonetheless, the most important thing to remember when deciding is this: do you really understand how it works? Because if not, it wouldn’t work the way you expect it to. Try to study first, take a crash course on trading, and then acquire more knowledge from the best (in other words, from us!).