Forex is one of the unique ways to invest in finance, and it is trendy for several reasons. Forex trading is about buying and selling currencies and is 100% electronic. That is, there are no physical trading floors, and all transactions happen on the Internet. For example, Alpari is one of the providers of such services. The average daily capital turnover in the foreign exchange market is huge and is around $4 trillion, overshadowing all other financial markets. So, today, we will discuss 10 reasons for the popularity of Forex trading.
The Forex market is open around the world 24 hours a day from Monday to Friday. This allows you to trade when it is convenient for you. Stock markets, at least in the US, are open only from 9:30 a.m. to 4 p.m. every day.
2. The Absence of Geographical Restrictions
Besides, currency trading is very convenient since you can trade currency from your own home using a regular computer connected to the Internet. And Forex brokers provide trading platforms for tablets and smartphones.
3. The Opportunity to Practice for Free
All good Forex brokers provide free real-time quotes, software, tools, news, analysis, and much more. You can open a demo account and try different strategies without any risks.
4. Low Overhead and Meager Entry Threshold
Another reason why Forex is so popular is the relatively small overhead and low entry threshold. The vast majority of Forex brokers do not charge commissions and make their money through spreads, which are displayed in a special window of the trading platform. You may not even notice that you are paying your broker, especially if the broker gives fixed spreads.
5. Leverage
Forex brokers provide margin. The so-called leverage allows you to trade in huge amounts, having only a couple of hundred dollars on your account. Of course, this is risky, but on the other hand, a trader can always choose smaller leverage, thereby reducing their risks.
6. You Don’t Need to Make a Big Deposit
You do not need a lot of money to start trading currencies. Brokers offer mini and even micro Forex accounts with which you can start working with a couple of hundred dollars.
7. Huge Market
The foreign exchange market is huge. It is many times larger than stock exchanges. They are not easy to manipulate. Even large banks can not do it. In such a huge market, there can be no problems with liquidity. You will always be able to close the deal at the right point.
8. Lack of Commissions
In most cases, there are commission and fees. Stock trading requires payment of a stockbroker commission. This means that you cannot trade as often as you want if you have a small account. But there are no such restrictions on Forex because there is no commission. Brokerage firms make a small amount of profit on each transaction due to the spread. You can trade currencies as often as you like without worrying about brokerage fees. And there is no fixed lot size that you have to buy.
9. Training Materials
There is a huge amount of beginners because of accessibility. They need training materials. Therefore, some specialists create these materials. Each broker must have a training department, and some offer a no deposit bonus for training. All this gives credibility to the Forex market.
10. Regulation
Forex is centrally regulated. The relevant authorities constantly monitor brokers. You can safely trade in the foreign exchange market, but you need to choose a reliable broker who has a license.
and then