Many people are choosing to trade Forex today and with good reason. There are many benefits of this trading option and multiple reasons why so many people are choosing this market. These are some of the main advantages of Forex trading and why it is so popular today.
1. Accessible 24/7
The Forex market exists worldwide meaning that trading is continuous as long as a market is open somewhere in the world. The trading officially starts when the market opens in Australia on Sunday evenings and ends after the markets close in New York on Fridays. The versatility offered is a huge benefit and one of the main reasons why it has remained so popular. Also, the greatest liquidity will occur when the operational hours in multiple time zones overlap, meaning that there are certain hours of the day when individuals can take advantage of the correlation between the liquidity and market activity.
2. Forex trading is low cost
As most brokers know, the spread is the difference between the bidding and asking price. While spreads in stocks tend to be fairly large, spreads in the international Forex market are much less. This makes Forex trading a cost-effective methods of investment trading available today.
3. No fees or middlemen
There are no commissions when trading on the Forex market. Brokers who often see a huge dip into profits by clearing, exchange, and government fees won’t have this problem in this unique market. The retail brokers in this market are compensated through the bid-ask spread. Businessmen can also spot currency trading which eliminates the middlemen and allows each person to trade directly with the market that is responsible for pricing on a certain currency pair. Not only does this expedite the process, it gives each trader more options and versatility.
4. No fixed lot size
In futures markets, sizes are generally determined by the exchanges and a standard-sized contract is generally 5,000 ounces for silver futures. However, in spot Forex, each person can determine their own lot size. This allows traders to participate with lot sizes that are as small as $25. Although, this amount may not always be ideal, it offers increased options to each trader.
5. No chance to corner the market
Since the foreign market is a huge arena of trading and has millions of participants, it’s not possible to control the market price for any extended period of time. This is a huge benefit for participants who are tired of central banks taking over and want a free trading market. The size of the Forex trading market grows and changes continuously, not allowing for any one bank or area to ever be dominant. Certainly there are some major players, but they do not have a monopoly on the Forex trading market.
These are the five main advantages of Forex trading today. Anyone interested in getting involved with Forex trading will find that this is a lucrative and huge market. It offers many options and benefits for traders today and is a great option for both continuing and new traders on the market today.