Every trader would likely claim various reasons for trading forex, and there is a wealth of knowledge available on the subject.
Foreign exchange (Forex) or currency trade is a highly liquid world market with a massive daily trading rate. Like all other investments, Forex investing is not for the faint of heart or the casual investor. Since you’ve learned the ropes, the forex market has certain distinct benefits over other ones.
1. The World’s Largest Financial Market
The foreign exchange (forex) market is the largest currency market globally, and it isn’t going anywhere anytime soon. It’s easy to see why the forex market is seen as a barometer of global economic and trade activity. Regularly, between $4 and $5 trillion (yes, trillion with a T) is exchanged. This equates to about $200 billion per hour, $3 billion per minute, and $50 million per second. With merchants like tickmill from all over the world participating, it is undoubtedly the world’s most open and global trading market.
2. Liquidity and High Volume
The forex demand is enormous, as we all know. So why is this so beneficial? Liquidity, in a nutshell. This means that, with the vast number of trades at any given time, you won’t have to wait in normal market conditions. You have complete freedom to buy and sell whatever you want. With a single click, and there will almost always be someone, on the other hand, ready to share back. Trading can also be automated. There are times where the market is calm, but there are always trades to be made., especially when trading common pairs like the USD/EUR and other majors.
3. The market is not owned by Anyone
Given the forex market scale and the number of players, no single institutional trader (no matter how large) can maintain price control for a prolonged period. The economy easily adjusts and evens out the playing field. Furthermore, the forex industry is decentralized, with no middlemen. You exchange directly with another market member, and a retail forex broker merely acts as a conduit. The economy, not one individual or a business, has the most direct impact on the industry.
4. Transaction Costs are Low
As previously said, the broker’s spread is the disparity between the bid and ask price, which is the retail transaction rate. High-capitalized brokers will deliver very low spreads, lowering your trading costs and increasing your earnings. Equities Executive account form has an average distance of 1.5 pips**, while its Premiere account has a spread of 0.4 pips**. It’s critical to comprehend how spreads are calculated. The space on GBP/USD, for example, is 0.3 pips if the bid price is 1.55310 and the asking price is 1.55313.
5. Beneficial for Everyone
Forex trade is not just for the wealthy. Starting as a forex trader doesn’t cost a lot of money, particularly when opposed to trading stocks or options, which is one of the reasons why it appeals to so many people around the world. Forex trading is open to ordinary people, even though they don’t have a lot of money to work with. Equity allows you to open a trading account with a $500 minimum deposit and leverage up to 1:500*. This doesn’t mean you’ll be a good trader right away; learning and becoming skilled takes time and trial, so it’s best to start slowly and gradually.