The currency trading market is always a hive of activity and being a $4 trillion a day market, it's understandable why. If you haven't yet started trading in currency, now is the time to start. With the availability of many online trading services, there isn't any reason why you shouldn't get involved. But in case you are not convinced yet, here are five compelling reasons why you should reconsider your stand.
Advantages of FX trading
Great liquidity - The size of the forex market is unmatched by any other trading asset. This means you can move large amounts of money easily, and at any time, given that this particular market never sleeps.
Accessibility - Unlike stock trading where you need a ton of money to start, forex is a more accessible area. While you do need a minimum balance to start trading, typically $100, it is generally affordable. You can trade on margin, where you basically trade more money than you initially deposit. This leverage is a constant in all trading sites. Though it carries risk with it, it basically gives you more trading power, and creates an opportunity of making good profits.
Low transaction cost - For forex, the cost of doing business is at an all time low. This cost, or spread, is low enough to be inconsequential.
Transparency - With forex, what you see is what you get. The immensity of the market means no single entity can control the market prices. The absence of middlemen means you deal directly with the market. This not only evens out the odds of all traders, it reduces execution time to fractions of seconds. The net effect of this is going long or going short whenever the conditions seem suitable. This transparency of this forex is one of the niceties that allure beginners, and for good reason.
Profitability - Perhaps the biggest advantage of forex trading is the probable ease of making profits. Unlike the stock market, where your profit hinges solely on the improving price of your stocks, forex increases your odds of profiting. Because you always work with two currencies, chances are when one currency dips, another improves, so you mostly end up on the winning.
Above are some of the advantages related with the forex trading market. And besides the above mentioned factors there is another aspect, known as demo accounts is related to forex, and that can be immensely beneficial for the beginners. The availability of demo accounts on many online trading platforms enable risk free trading.
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