Currency Trading or Forex discussion as it is popularly called is one of the best ways to make money for investors. Over the years currency trading market has emerged as the biggest market in the world surpassing all the equity and futures market of the world put together. But currency trading requires patience and intelligence. It is definitely not for the weak hearted. But it has many benefits as well. First and foremost, people can do trading in this market from anywhere across the globe with just a computer and an internet connection. Many people hence depend on this as a regular source of income.
24 hour market – Forex markets open on a Monday morning and they remain open till Friday afternoon. This gives traders the privilege of trading any time. The exchange rates keep fluctuating every minute. Hence it is a very volatile market. Unlike other markets, a person can also perform trading overnight as the markets are open 24 hours in a day.
Liquidity – Liquidity is a term that is referred for assets that can be converted into money quickly. Currency trading displays high volatility. That is, large amounts of money keep moving into and out of foreign currencies with a minimum movement in its price.
Low Transaction costs – The transaction cost is called a spread in Forex terms. This spread can be defined as the difference between the buying and the selling price. These costs are very low in currency trading compared to other methods.
Leverage – Forex brokers allow individual traders to trade in the currency trading market with a certain leverage. This leverage can be defined as the ability to trade more money in the market than the amount that is present in a trader’s account. You can actually control a trade worth $50,000 using only $1000 of capital, if one wants to know about it in laymen terms.
High profit Potential – Forex is one such market where there are no restrictions for directional trading. If you feel that a certain currency pair is going to increase in value, you can buy it or go long. In the same way, if a currency is decreasing in value, you can sell it or go short.
Currency trading has immense benefits and it has made many people to get rich in a short span of time. This is one of the prime reasons why new traders keep joining the bandwagon every month. People who wish to work from home and spend time with their family can easily choose this as a profession.