In these modern times, forex trading seems to offer a better return than the stock exchange fxcm markets. You might believe this because you see advertisements all over the place trying to get you to sign up for their account, purchase their courses and use their trading software. Is forex trading as lucrative as it seems? We can examine the forex trading advantages and let you decide.
1. No commissions or fees
Forex trading does not charge any commissions or fees. The spread, or difference between bid and ask prices is how brokers make money. You only need to ensure that the price of the currency moves enough for you to be able to profit.
2. There is no fixed lot size
Certain markets such as commodity futures require you to trade with a specific lot size. In spot forex, you are free to trade any lot size. Forex brokers offer fractional or small lots.
3. Trade 24 Hours A Day, Five Days A Week
We can’t watch the markets while at work. We can trade after we finish work, or at five in the morning.
4. High Leverage
It doesn’t take much money to open an account. Open an account for as low as $50. Leverage is offered by brokers between 100 and 200 times the margin deposit. This means that with just $100, you can manage $10,000 in one trade. If you trade well, small price changes can lead to large gains.
5. Massive High Liquidity Markets
The forex market is a global marketplace that trades trillions of dollars every day. Even large banks cannot influence these markets. Trading is so popular that it’s easy to get into and out of a position.
6. Eager Brokers
Brokers compete with one another for your business. To get you to sign up for an account, they offer a variety of products and services. Demo accounts allow you to test or practice your skills without risking real money. Free charts for analyzing the market and forex breaking news.
7. Starting up costs are low
Forex trading is easy to learn. All you need is a computer with an Internet connection. About $100-200 is the cost of trading robots which act on signals to buy or sell and open and close your trades automatically.
The forex market is looking pretty attractive when you compare it to other investment options. Trading futures might require that you open an account of at least $5,000 and its high-risk volatile price movement may be difficult to handle. Stocks, on the other side, may take too long and we lose interest.
The forex market seems to be the perfect middle ground where we can all benefit.