1.5 Key Features and Advantages of Forex Trading

Advantages of forex trading as compared to other marketsThere is now huge retail interest in trading Forex, and some of the key reasons are given below:

 

Round the Clock Trading

The FX market never sleeps. It’s open round the clock, except for the weekend and Bank holidays. This means people can trade the market at times that suit them, even after a regular job.

 

No Risks of Manipulation

No manipulation. The FX market is so huge and liquid that you need have no fears about market cornering or manipulation. The trading volumes are simply so big that there is no trading entities big enough to manipulate the prices in their favor. The exceptions can be central bank at times. For all extents and purposes it’s as close as you can get to a perfect market. In localized markets some local large brokers can easily manipulate the pricing by buying or selling large volumes. Foreign Exchange market being a huge global market, prevents those possibilities until or unless some very large entities like the Central Bank of a large economy interferes to keep the nation's interest in check because of huge upside or downside or the currency valuation. Any huge upside or downside of the currency valuation affects the exports and import pricing respectively.

 

Anybody can trade

There are different types of trading accounts available that suit everybody. You don’t need to be very rich, or even rich to trade FX. Accounts range from standard to mini or micro accounts that are easy on the pocket.

 

A highly liquid market

The FX market has so many participants and trades such high volumes that you are always assured of your order getting filled.

 

Wide range of platforms

Most brokers have various platforms – pick one that suits you – use a PC or laptop, an iPad or even your mobile phone!

 

You are the Boss to Decide How Much You wish to Invest

Tailor your trade position size. Unlike other markets where you can only trade in pre-determined ‘lot-sizes’, you can practically customize your trading unit in the FX market. Even when markets like stock markets do not have the constraints of lot sizes, even the price of one stock may be higher than what you wish to invest. In Forex markets you can trade even with 1 dollar. Please note that many brokers may deal with only fixed lot sizes but then there are many reputed brokers where you do not find any such constraints.

 

Low Trading Costs

Most times you would only have to pay the bid-ask spread, which, nowadays is pretty competitive. No other fees apply, e.g. brokerage commissions, exchange and government fees etc. 

 

Leverage Options

It is common in the FX market for brokers to offer you leveraged trading, which means you only have to put up a small percentage of the value of your trade as a margin. This implies that with careful trading you might be able to make some very nice profits on a low investment.

 

Freebies, freebies!

Joining bonuses, demo accounts, specialized charting packages, great research, real-time news flow are some of the free stuff you get in the FX market.

 

 
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