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Benefits of Trading Forex

Benefits of Trading Forex

Here are some advantages of trading Forex:

Liquidity. Forex is by far the most liquid financial market in the world with nearly 2 trillion dollars traded everyday. This ensures price stability, and you will always be able to open and close transactions. Also it is hard to manipulate the market in a extended manner.

24hr Market. The market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes on Friday at 5:00 pm EST when San Francisco terminates operations. There are transactions in practically every time zone, allowing active traders to choose at what time to trade.

Leverage trading. Trading the Forex Market offers a greater buying power than many other markets. Some Forex brokers offer leverage up to 400:1, allowing traders to have only 0.25% in margin of the total investment. For instance, a trader using 100:1 means that to have a US$100,000 position, only US$1,000 are needed on margin to be able to open that position.

Low Transaction costs. Almost all brokers offer commission free trading. The only cost traders incur in any transaction is the spread (difference between the buy and sell price of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency pair) in some pairs.

Low minimum investment. The Forex market requires less capital to start trading than any other markets. The initial investment could go as low as $300 USD, depending on leverage offered by the broker.

Specialized trading. The liquidity of the market allows us to focus on just a few instruments (or currency pairs) as our main investments (85% of all trading transactions are made on the seven major currencies). Allowing us to get to know better each instrument.

Trading from anywhere. If you do a lot of traveling, you can trade from anywhere in the world just having an internet connection.

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