Top 10 Benefits
Here are the top 10 advantages of forex trading

No. 1

Large, global market

One of the biggest benefits of forex trading forex is the size of the market. It is huge. Trillions of US dollars are exchanged every day and at all hours because people are trading from all over the world. So it is truly a global market.

No. 2

It’s for everyone

There are a lot of approaches that suit various levels of experience. You can go short or long and there are several tools and theories that can benefit you.

When you are starting out, try a free demo account to hone your skills without risk. This means that without any financial commitments – you can get a real sense of the trading platform and familiarise yourself with the interface and the market movements so that you can develop a strategy before you put real money down.

No. 3

Low transaction costs
Forex trading is associated with very low costs because there are no commissions or fees like with securities or equity trading. You can say that transaction costs are almost ‘built into’ the price on the forex market – due to something called a spread.

The spread is something a forex broker gets for making the trade happen. And spreads are measured in pips. For most currencies, a pip represents 1/100 of a percent – or the fourth place after the decimal point. Let’s say in your forex trade the bid price was 1.3234 and the ask price was 1.3233, then the spread for the deal was 1 pip.

No. 4

You can benefit from leverge

Every time you trade, you are betting on one currency over another. Selling short or shorting is a trading strategy where a trader speculates that the value of a currency will go down, so the stock they then sell is the currency they believe will drop in price.

Going long is the opposite. It is when a trader bets that a currency – compared to another currency – will increase in value.

No. 5

Liquidity refers to how easy it is to buy and sell an asset – and with limited effect on its value. Generally, a forex sale is just a couple of clicks away – which means you can move fast, and you can do it around the clock. And because other traders can also trade around the clock, a massive amount of money moves through the market.

Because the forex market is so enormous, it is also extremely liquid. This is an advantage because it means that under normal market conditions, with a click of a mouse, you can instantaneously buy and sell at will.

No. 6

Volatility of the market
There can be major movements in currency values, depending on economic stability, the global economy, political news and so on, that is what is meant by volatility. You can interpret this as a pro or a con, because it comes with a high level of risk. Some will tell you that volatility is strongly connected with liquidity. As you can imagine, currencies from emerging markets can be more volatile than other major currencies.

No. 7

Nobody owns the market
No single entity can significantly manipulate the forex market – it is sufficiently liquid and is so huge that not even a central bank can influence, impact or change the market price for quite some time.

No. 8

24-Hour trading
The forex market stretches across time zones, so there is pretty much continuous trading. The trading day, you can say, starts in the USA when the first major market opens and it ends in Sydney, Australia at the close of business.

No. 9

Low barrier to entry
You might think that you would need a lot of money to get started, but when compared to trading stocks – you don’t need a lot at all. Some online forex brokers offer trading accounts with a minimum account deposit of R100. These are also known as micro or mini trading accounts. You are not encouraged to go in with the bare minimum, but it does lower the barrier to entry for forex trading.

No. 10

There’s good technology for trading
When you compare forex trading to other markets, like those dealing in shares and stocks, then forex trading has been quicker to adopt tech to use to the advantage of the trading world. The tools and platforms are also constantly being improved to make it much easier for forex traders to trade effectively.