7 Reasons to Trade Forex: Many people ask about why we trade Forex. I believe that, like most people, when I was first exposed to trading, I had no knowledge of the Forex industry. It was just normal to search for trades on the stock market.
However, I discovered that my trading was severely limited; by the time I got home from work in the evening, all of the activity had ended. I switched to Forex mostly to take advantage of the 24-hour trading hours; I was always found at my machine in the middle of the night, waiting for the next bar to appear.
In comparison to futures, there are no trading exchanges. Trading is conducted by large banking establishments all around the world. For futures, you are usually restricted to trading only within the few hours when they are open; if major news breaks and the price begins to move against you while the exchange is closed, you might end up losing a lot of money as you wait for the market to reopen. With Forex, you will still be able to exchange 24 hours a day, five days a week. And all these can be automated using forex bots.
The world’s currencies are exchanged against one another, with the Euro, the US and Australian dollars, British Pound, Swiss Franc, and Japanese Yen being the most common. Because of the 24 hour trading, big price spreads such as those seen in stocks on the opening are rare, and currency values often trend more than stock prices.
There are some drawbacks of trading Forex rather than stocks, such as the cost of data providers. Stocks are traded for free charting tools, which is provided by several Forex traders. With over $1.5 trillion, 46 times the size of all future markets together.
Being exchanged in a single day ensures that you are still certain of a trade. With low trading rates, no charges, or exchange fees, it is no surprise that more and more traders are moving to Forex.
However, even with all of these benefits, trading is a high-risk game that can only be done with money you can afford to lose. There is no excuse not to follow the many traders who benefit from trading the Forex markets if you have a strong Trading Strategy and Money Management in place.
7 Reasons to Trade Forex:
- It never closes down. It is available 24 hours a day, seven days a week. Trading positions open on Monday at 7 a.m. New Zealand time and close on Friday at 5 p.m. New York time. During this time, you are free to enter and leave the market anytime you want. It is an ongoing electronic currency swap. This is fantastic so you can trade anytime you have free time.
- Use leverage. Currency lots of $100,000 can be traded for as little as $1000. This is mostly due to the simplicity with which you can purchase and sell; certain traders can exploit up to 200 times, allowing you to manage a 200000 unit currency spot with $100. It is the best use of trading capital available; even bank lending on real estate projects does not come near.
- Predict the accurate results. Currency markets normally replicate themselves in repetitive intervals, allowing you to identify patterns. Technical analysis assists in identifying and profiting from these trends.
- Low transactional costs. In other words, your errors would not cost you a lot. And if you have a mini account and deal in limited numbers, good brokers would not charge fees to trade or hold an account.
- Earning Potential Is Endless. Forex is the world’s biggest money exchange, with a total trading volume of more than $1.5 trillion. It dwarfs both the stock market (50 billion a day) and the futures market (30 billion).
- You will profit under any market condition. Each market is one currency vs another, but when you invest in one, you sell in another, so there is no prejudice against one currency going up or down. This means it is entirely up to you to decide which currency to purchase or sell in. You will make money whether the market is up or down.
- The market’s openness. This is a benefit of either company or trade situation. This means you can handle the danger and follow orders in a matter of seconds. It is very effective and helps you to avoid unpleasant surprises.
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