The Forex Market is often considered the largest financial market worldwide. This primarily arises from the benefits of liquidity, accessibility, global reach, etc., it offers. So, if the idea of Forex or Currency Trading, i.e., the buying and selling of currency, appeals to you, you must go for it.
In addition, trading in the Currency Market provides several exclusive advantages, some of which we point out in this guide.
What is Forex Trading?
Forex Trading involves the buying and selling of one currency for another. In the currency market, trading always takes place in pairs. You must sell one currency and buy another during every transaction. The pairs are referred to as currency1/currency2. Here, currency 2 refers to the quote currency, while currency 1 is the base currency.
Advantages
The benefits of Currency Trading include the following:
- Beginner-friendly
If you are a first-time trader who wants to make small investments, you can easily enter the currency market. Brokers often offer demo accounts, enabling beginners to test their skills before they commit to deals.
- Market is global
The market is huge and includes traders from around the globe. You can easily gauge the importance of this market by the fact that more than $4 trillion is exchanged here daily.
- Open round the clock
The Forex Market is global, and trading in this market continues if the market is open somewhere around the world. Hence, it operates for 24 hours daily, five days a week.
- Highly liquid
Liquidity refers to an asset’s ability to be sold and bought with little effect on its value. In the case of Forex, liquidity allows investors to trade with minimal risk. Since a huge volume of foreign exchange trading happens around the clock in the currency market, it is believed to be the most liquid market globally.
- Advantage of leverage
Leverage refers to the option of placing trades using the money you have borrowed. Forex Trading provides high leverage to traders. This, in turn, enables them to borrow funds from brokers to increase their market exposure and make more money with less.
- Not controlled by a single player
The Forex Market involves numerous participants globally. Hence, a single player cannot manipulate the prices here. Instead, external factors like the economy control the costs here. This market also has no middlemen; brokers only connect buyers with sellers.
- No special permits required
The Currency Market allows everyone to trade. You only need to open a Trading Account with a registered broker and manage some initial capital.
- Money-making opportunities
Plenty of trading opportunities are available in this market, irrespective of whether the markets are falling or rising.
- Technology
Today, several Forex brokers provide online trading platforms with the latest technology. You can conveniently access your Trading Account using your smartphone and place your trades within seconds.