Merits of Forex Trading
A great benefit of forex trading is that there are no commissions involved. In this case you get to save a lot of money. Clearing fees, exchange fees or brokerage fees are not involved in forex trading. The government is not involved which means there are no government fees either. Most retail brokers are compensated for their services through bid-ask spread. Another advantage of forex trading is that you will not interact with middlemen. This means you will trade directly with the market. In this case the market names prices on the currency pair.
Contract sizes in forex trading are not fixed which is another advantage. The contract size you want will only be determined by you. This is beneficial to you because you can trade with a small account. Transaction costs are low in forex trading. Under the normal market conditions, the retail transaction cost can be very low. The retail cost in large transactions is also very low.
Another benefit of the forex market is that the market doesnt stop operating. The market doesnt open at specific hours. This can be very convenient for people who are always busy. This is due to the fact that they can trade when they are not working. Forex trading is of great benefit because no one can actually corner the market. There are very many participants in the foreign exchange market. In this case the market price cannot be controlled by a single entity. This applies for both the current period of time or for an extended period of time.
Traders get a lot of leverage when it comes to forex trading. A small deposit can actually control a large contract value in this case. As a trader you can make huge profits from this leverage. Leverage also enables a trader to keep risk capital to a minimum. For leverage to work ensure there is proper risk management. Another benefit of forex trading I high liquidity. The forex market is very huge. High liquidity is a great advantage because it means under normal market conditions, you can easily buy or sell. This is due to the fact someone else is interested in your other side of the trade. In forex trading you are never stuck on a trade. You will be in a position to set your online trading platform to close the moment you reach your desired profits. Another advantage of forex trading is that there are no barriers to entry. In this case getting started doesnt require much cash. This means you can open a mini or micro trading account. Forex trading is available to average individual with less start-up capital. There are free demo accounts in forex trading that enable you to build your skills on forex trading. This account can also give you the current forex news.