Advantages in Forex

What makes forex trading different from the dozen of financial markets out there and why should you invest in currency trading ? Here are some of the advantages in Forex trading:

High Liquidity

Forex is the largest market, with up to $4 Trillion trades in forex exchange each day. Though it comes with risks, price changes of currencies also present big opportunities.  The forex is open 24 hours a day as it is a global market, ensuring constant activity in prices. This allows traders to trade around the clock providing forex heavy volumes of activity making it a market that never sleeps.

Range of Methods

There are a number of opportunities that the forex market can offer, no matter your trading preference. You can use basis like technical factors, macroeconomic or geopolitical factors when picking trades. Buy or sell currency according to trends in the price history, changes in the economic indicators or world events.

Develop your picking strategy by looking into currency as abstract markets, or directly linked to a country’s economic health. You can develop your trading plan according to your style of trading like short term – like speculative trading, or long term – like hedging of forex pairs.

Emotional Detachment

Trading currency doesn’t build up attachment the way trading stocks and investments do. Stock traders and pickers, especially those that found their success in a particular position, might find it hard to close it should the position go downwards.

To summarize why choose forex in trading:
  • 1.You have the option to go short or long on any given currency pair.
  • 2.There are huge leverages that you can use.
  • 3.The market is global and open 24 hours.
  • 4.Low trading costs due to tight spread.

Traders have the chance to go for speculative trades that yield high rewards but exposed to risks of high losses as well. The same can be said with using leverages where the potential to earn is high with corresponding high risks as well.

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