Why trade forex?
Why trade forex? Forex trading has been very popular over the past decade due to the huge amount of advantages it provides to traders, some of which can be listed as follows.
Forex never sleeps:
Trading continues all over the world during business hours in different countries.
Thus, you can trade major currencies at any time, 24 hours a day, 5 days a week.
The lack of official working hours or a specific exchange for trading currencies made it easy to conduct forex trades at almost any time of the day or night.
Buying or selling:
Unlike many other financial markets, where it is very difficult to open short positions on the assets traded in, there are no restrictions on selling currencies.
If you expect the price of a currency to rise, buy it.
If you think the price will go down, sell it. In other words, forex does not have a so-called “bear market” – where you can make profits (or losses) at any time.
Low spread cost:
Most forex accounts trade commission-free and does not charge exorbitant fees for exchange services or data licenses.
The cost of entering forex trades is limited to the difference between the buy and sell prices (the spread), which is clearly displayed on the trading screen in front of you.
Unrivaled liquidity:
As mentioned, the trading volumes in the forex market exceed 4 trillion dollars per day, and most of these trades are concentrated in a small number of currencies, which means that there are a huge number of parties involved in the trading operations.
This makes it easy to enter and exit trades at any time, even with large trading volumes.
Available leverage:
You can trade forex with large leverage (up to 1:400) thanks to the deep liquidity available in the currency market.
This feature allows you to take advantage of even the smallest moves in the market.
However, be aware that leverage is a double-edged sword, as it can magnify your losses as much as your profits.
Exposure to global markets:
With increasing globalization and the blurring of borders between markets and countries, investors are in a frantic race to seize profit opportunities anywhere.
If you want to take advantage of broader exposure to global markets and invest in other countries (or have a bearish outlook!).
Forex provides an easy way to gain this exposure while avoiding common complications such as the securities laws of foreign countries or reading financial statements in different languages.