Imagine yourself lying on a tropical beach, tasting an icy refreshment and looking over charts, as money’s pumping into your trading account. Sounds like a dream, however it’s only one of 5 main advantages you get from Forex trading.
1. Trade Wherever, Whenever You Want
Forex trading is available for almost 6 days a week as the international nature of the market means that it opens in New Zealand and closes in New York. Wherever you are at the moment, the only thing you need is internet connection, and you can start trading directly from your smartphone.
2. Access Your Funds Instantly
The Forex market is the largest financial market in the world with over $5 trillion traded on average each day. Even if you earn only 0,00001%, it equals $500,000.
You can enter and exit large positions quickly and easily and never get stuck with a position you don’t want to hold. In comparison, if there is no one to buy your shares, then you cannot sell them. This means that in a stock market, you could be losing a lot of money, while being powerless to do anything about it.
3. Trade in a Crisis-Free Market
When there is an economic crisis, most financial markets deteriorate markedly. Stock trading slows or freezes, real estate sales grind to a halt, and regular businesses lose profitability. The Forex markets aren’t affected by recessions because you trade currency pairs. If one currency goes up in value, another one must fall, thus you can earn on both sides of the market conditions, but losses could also occur. Learn what influences exchange rates and you can start to form your own opinions about what will rise and what will fall!
4. Start Trading Without A Huge Investment
As recently as the new millennium (year 2000), the deposit required to open a retail Forex trading account was as high as $50,000 or even more! Now you can open a Forex account for as little as $100 depending on the broker you choose. Trading costs (like commissions and spread) have also fallen dramatically in recent years. For a new investor, Forex trading without a doubt is one of the most cost effective markets to be involved with.
5. Use leverage to trade with smaller capital
Nowadays, you can trade up to 30X bigger investment sizes than the capital you have available for trading. It’s called leverage. For example, leverage of 30:1 can allow a trader to deposit $100 and trade with as much as $3,000, thus allowing far higher profits. Of course, if the market moves against your prediction, beware that the same ratio will determine how fast your investment will be lost. For this particular reason, best traders use “stop losses” to make sure they can afford the potential loss.
What do you need to get started in forex trading?
With many online brokers, what is a minimum amount that you can begin forex trading with?
What is the typical minimum amount needed for a premium trading account?
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