Advantages of forex trading

Forex trading is a kind of buying and selling different currencies, which are combined in the relevant currency pairs. To make a profit, Forex traders, need to buy a currency at a low price, then sell it at a higher, or sell the currency at a higher price and then in some period of time to buy currency at a lower price.

Novice traders should understand that making a profit is not enough simply to buy and sell a currency, but it should also be taking into consideration current market conditions and the factors contributing to its changes. Therefore, profitable trades often associate with good (detailed) analysis of the Forex market.

Forex trading has many advantages and benefits compared to stock trade and other financial instruments. In the following lines you can learn more about the advantages of Forex trading that are the basis for the tendency more and more people to perceive an opportunity for own online business.

24-hour working time

Market participants can trade 24 hours from Sunday evening to Friday afternoon EST (Eastern Standard Time), without waiting Forex market to open, like in the case of stock markets. As a result, anyone can choose to trade in his convenience.

Lack of commissions

In most cases, Forex brokers do not charge commissions on currency traded quantity, because their profit come from the difference between the buy and sell course. Moreover, traders (Forex traders) are not charged for clearing and state taxes.

Advantage to choose currency amount for trading

Unlike the futures market, Forex market participants are not obliged to trade predetermined amount of a currency under a lot or contract. Therefore, traders have the opportunity to enter the market with small accounts on the order of $ 100, € 100 or £ 100. 

Forex market can not be controlled by anyone

Due to the large size of the Forex market can not be controlled by one person for a long period of time, in consequence of which he can be easily manipulated in the long run. 

High liquidity

The size of the Forex market makes it extremely liquid, which allows investors to buy or sell the currency when they want, without having to wait a long time to find partners whose interests correspond to the demand or supply. 

Ability to open a demo account

The majority of online brokers offer free Forex "Demo" accounts, which are very useful for traders because through them can improve their trading skills without risking real money, as is the case with real accounts. Moreover, free demo accounts allow traders to compare the features of trading platforms offered by various online brokers and so to choose the one that is best for them. 

Ability to open the Mini, Micro and Macro accounts

Most online brokers offer to their clients the opportunity to open various types of accounts, such as mini, micro or macro, depending on the amount of the initial deposit. A variety of accounts offered by brokers allow investors to become part of the Forex market through an initial deposit of $ 100, € 100 or £ 100. Low level of initial investment makes Forex trading available to anyone who wants to engage this kind of "business".

Profit in both bull and bear markets

In the case of stock market traders can profit only if the value of the stock rises. An exception to this rule is only shares authorized for short sales in a recession and falling markets.

Unlike other markets, financial instruments, Forex market is different in that it investors can generate profits in both terms of a rising market and in the event of market downturns and profit depends entirely on whether it is taken short or long position.

Opportunity for margin trading

Based deposit (margin) can be used for trading currencies, stocks and stock indexes. The basic idea is that you do not need to have the full amount in your account to buy 2,000 shares from the company Apple Inc. for example - totaling 95,800 dollars.

"Margin" literally means difference or reserve. In this context Margin trading is trading on a guarantee amount provided by you (the amount used for guarantee and is in your account). Margin (guarantee) is defined as the percentage of the total value of the position.  1% margin means that you ca open position ( if you have $1000 in your account ) for the $ 100,000. If margin is 5% you ca open position for $ 20,000.