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The benefits of trading FOREX

There are many reasons for trading currencies, some of which are economical and others personal. It is almost impossible to cover all reasons and benefits, but we will discuss the most common reasons for trading FOREX.

The market is big enough that no one can corner or control the market.

The foreign exchange market extremely big and has many participants that no single entity not even a large bank can control the market price for an extended period of time.

You do not pay commissions to anyone

There are a lot of fees that you can avoid by trading currencies online such fees include; clearing fees, exchange fees, brokerage fees because you are trading directly with the market responsible for the pricing on a particular pair of currency.

High Liquidity

Because the Forex Market is so big, it is also extremely liquid, which means that under normal conditions, with a click of a mouse you can buy and sell whenever you want. If you want, you can even set your online trading platform to automatically close your position at your desired profit level (a limit order), or close a trade if a trade is going against you (a stop loss order)

Low transaction costs

The retail transaction cost, otherwise known as the bid/ask spread is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent.

The market is open 24hours a day

The market is open Sunday evening to Friday afternoon EST, anytime in between, the Forex market never sleeps. This gives everybody the flexibility of trading on their own schedule.

High Leverage

Most FOREX trading platforms gives you some leverage by allowing you to use a small margin deposit to control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies, depending on whether you are trading on a regular account or what is called a mini account. This also means that if the market went against your position, your losses could be as great as the gains you would have made if the market favored your position.

NOTE : Before you go spend your money, I suggest you do some study of how the market operates, careful study and master market indicators. If you have to practice with practice account until you are comfortable trading with your own money. Go against this rule and you will loose your money.

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