Advantages of Trading Forex
It seems that more and more people are learning how to trade, and more specifically how to trade Forex. And for good reason, the Foreign exchange market is the largest market in the World.

In this quick article, I share with you 10 advantages of trading Forex!

 

1. Market Hours (24/5)

The Forex Market is available to trade 24 hours a day/5 days a week from Monday to Friday. This means that you can fit your trading around your job (part or full time), school or other education, even running a business. Also, some currencies are more active during certain times of the day, so you can even plan your trading around those times. With the market open almost constantly, there is opportunity to make money at almost any time.

2. The potential to profit from rising or falling markets

In Forex, you can earn money whether the market moves up or down. In trading this is known as either going long (UP) or going short (DOWN). This means no matter what the market sentiment rising or falling, you have the potential to make money.

3. The size of the Market

The Forex Market is the largest market in the World, turning over roughly 5 Trillion USD per day. This means that you are more secure in entering and exiting your position, without having the market move too much before you either exit or enter your trade. Also, because the market is so ginormous and has so many participants, it makes it next to impossible for anyone to control the market for a long period of time.

4. You don’t need to be a millionaire

That may be your aim eventually, but you don’t need to start out with a bulging bank account. Because of the relatively small PIP sizes (What’s a PIP?) that one can trade, it isn’t necessary to invest large amounts of money into trading to begin with, it is possible to start off with a smaller account size, enabling almost anyone to get into trading Forex. Of course, I wouldn’t advise to start with too small of an account, as you must adhere to a good money management plan.

5. Low cost to carry out a trade

To make a Forex trade transaction, the cost to you as a trader is relatively low. Typically, you only pay the spread (the difference between the Buy price and the Sell price) on a single trade, this could be as little as 0.5%, oftentimes much less!

6. What middleman??

That’s right, when trading Forex you cut out the middleman as you trade directly with the market that governs the price of the pair you are trading.

7. Leverage

Understanding Leverage is important, it basically enables you to take a much larger trade for a small initial size. For example, you can trade £10,000 worth of currencies with just say £500, this means that you can make a lot more money with a smaller account. However, beware! Leverage can destroy your account just as quick, because you also stand to lose more.

8. Demo Accounts

Almost all Forex Brokers offer a demo account, where you can trade the market with demo or practice funds. The advantage here is you can get to know the ins and outs of the platform and get used to using it before diving in with real money. Please note what I said, get to know the platform..not trading. Trading a demo account and trading a real account are two completely different animals, the only way to get used to trading real money, is to trade real money.

9. You decide how much each PIP is worth

In Forex you profit as the market moves in your direction, how much you make is determined by how many PIPS the market moves. How much each individual PIP move is worth, is up to you. You choose this value, however what you choose must be relative to your account balance, you can’t trade £5,000 per PIP with a £5 account.

10. Freedom of time

You know what my favorite thing about trading is? Whilst I enjoy the money the thing I like more is the time freedom, I love spending time with my family and friends. Forex enables you to not only be money rich, but time rich.


Trading CFDs, Spread Bets and Foreign Exchange carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for everyone. Ensure you fully understand the risks involved and seek independent advice if necessary.

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