Trading Forex is fast becoming a popular choice for traders who wish to trade in the financial markets. Other than high liquidity, easy accessibility and open 24 hours a day, there are other reasons why more and more traders are choosing to trade Forex over other markets.
Low Costs
Forex trading can have very low costs (brokerage and commissions). Most Forex brokers do not charge a commission on each trade as they make their profits from the spreads between currency pairs. Therefore, you as a trader do not have to worry about brokerage charges. Compare this to equities or other securities trading where the brokerage structure varies widely and a trader must take such fees into account.
Suitable For Various Trading Styles
Since the Forex market is open 24 hours a day, you can trade anytime of the day. If you are holding a full time day job, you can trade in the early morning or late at night. Many traders like to trade on the smaller timeframes like the 5-minute or 15-minute charts where they can enter and exit a trade within minutes up to several hours. Traders can also take long-term positions and last for days to several weeks.
Highest Daily Trading Volume
Compared with any other financial markets, the Forex market has the largest number of market participants. The daily volume is easily more than $5trillion and this provides the highest level of liquidity. This means even large orders of currency trades are easily filled efficiently without any large price deviations or slippages. The Forex market is almost impossible to manipulate for long periods by any single person. A billionaire can easily control the price of equities for days, driving the price up or down by taking a large position. In Forex, a billion dollar trade is not significant to move the price in any particular direction for even a few hours in a day.
No Central Exchange
Being an over-the-counter (OTC) market operating across the globe, there is no central exchange or regulator for the forex market. Various countries’ central banks occasionally interfere as needed, but these are rare events, occurring under extreme conditions.
One final advantage of trading Forex is the ability to take SHORT Positions, something which is banned for some financial markets. This means that even in a bear market, traders are still able to profit.
There are a few more advantages of trading Forex that have not been covered today. Keep a lookout for tomorrow's article where I will cover the rest.
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- Daily Forex #1 - Will Forex Trading Be Banned
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- Daily Forex #6 - What Makes The Price Move
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Many people as "what are the benefits of forex trading" and you've answered the question in a very good and constructive way. You're right, forex trading offers a number of benefits to traders over other trading instruments.
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Establishing a connection to your trading platform is the first step to executing forex orders. If you receive a persistent "NO CONNECTION" error on FBS, some basic troubleshooting can get you back up and running. First, restart your platform and device - simple resets often resolve temporary glitches. Also check your internet connection and try switching between wifi and mobile data. If possible, try logging in from another device to isolate the issue. As a last resort, contact fbs problems - with patience and some diligence, connectivity problems can usually be fixed swiftly.
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