Introduction of Forex trading
Forex market is a very popular marketplace for active traders as it has all the qualities an active trader wants in a market like high liquidity and potential to make the profit in both rising and falling market.
1). A 24-hour open market:
Forex market is a market which technically stays open for 24 hours. As it is a global currency market the trading and movement in the market continues in the various market hour of different time zones which makes this market a 24 hour 5 day open market. Those unique characteristics of forex market make it available for everyone as they can trade anytime they want even if you want to trade on a part-time basis you can do it as the market is always open on weekdays.
2). Low minimum investment:
Trading In Forex market is a very profitable business but till it requires very less amount to start with. Anyone with an investment as low as 100 USD can open a trading account and start trading in Forex market and make the profit out of it.
3). Low cost of trade:
In the forex market, most of the broker’s charges there fee only with the bid/ask spread and that spread is also very low, unlike another market in forex there are no other charges like exchange fees or clearing charges that make the cost of trade very low.
4). Leverage:
Forex market is a market where you can get massive thousand times or even more leverage on your investment amount. That enables a small deposit amount to trade with a full lot and thus it increases the return on equity and on the other hand, it also helps the investor to keep the risk capital in check.
5). Liquidity:
Forex market is a highly liquid market and it is one of the most liquid markets in the world due to its 24/5 trading availability which makes the supply and demand going every time all over the world. Liquidity makes trading in Forex market very easy as you don’t have to wait for the counterparty to come in the market and offer you the price you want and wait for queue to get clear but you can place a pending order and it the price will come in the market you will get your part right away or else you can just enter in a trade with a simple click. And in time of closing your position then also you can close your position right away without any hurdle.
6). Demo trading account:
In forex market almost all the brokers provide a free demo trading account to new traders who want to learn and understand Forex market without risking their capital and they can start practicing trading with virtual money available in demo account.
That demo account helps new traders who want to start trading in Forex market to understand the market and also it helps them to understand the order placing and market movements that will help them to become a successful trader afterward.
Bottom Line:
Forex market is a very unique and interesting market and it attracts a lot of new traders every day because of its edge over other markets in terms of liquidity, leverage, and timings. Forex market gives every tool a trader needs to make the profit but everything available in the financial markets has risk associated with it and forex market also have the risk.
With a high amount of leverage, the risk of losing capital becomes also high and that makes this tool a very sharp blade if not used correctly you can easily cut your own hand with it. And the 24/5 open market also have risk as you cannot watch the market 24 hours but the market will stay open when you sleep too so in that case if you keep a position open when you sleep then you will increase the risk as if the trade starts to give negative movement you cannot take immediate action on it as you are sleeping.
So we can say that the Forex market is a unique market with a lot of potentials to make money but it also has some degree of risk associated with it. And if a trader wants to be a successful Forex trader then he has to fallow the Forex Trading Millionaires Strategies Which we had published in the previous blog.
