Merits of Forex Trading
A major advantage of forex trading is that there are no commissions. You will be able to save money in this case. 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. Forex brokers are compensated through bid-ask spread. There are no middlemen involved in forex trading which is an added advantage. In this case you will directly with the market. The market will be responsible for pricing you on the particular currency pair.
Another benefit of forex trading is that contract sizes are not fixed. In this case you determine your own contract size. This is a great advantage because you will be allowed to trade with a small account. Another benefit of forex trading is that transaction costs are very low. The retail costs can be very low under normal market conditions. Even for large transactions the cost is still low in forex trading.
Another advantage of forex trading is that the market operates on a 24-hour basis. The market doesnt open at specific hours. This can be very convenient for people who are always busy. This is because they can trade during their part-time hours. Forex trading is of great benefit because no one can actually corner the market. The forex trading market is huge which means the participants are also many. No single entity has the authority to control the price in this case. In this case it appies for both the current and 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. This leverage is helpful to traders because they can make huge profits. You can keep risk capital at a minimum through this leverage. For leverage to work ensure there is proper risk management. Another benefit of forex trading I high liquidity. The forex market is very huge. With high liquidity you can easily buy or sell under normal market conditions. This is because there is always someone who is willing to talk on the other side of your trade. You never get stuck on a trade in forex trading. In this case once you reach your desired profits you can set your online trading platform to close. There are no barriers to entry when it comes to forex trading. This means you can actually start with a small amount of cash. You can either open a mini or micro trading account. This means forex trading is also accessible to the average individual. In forex trading you can build your skills by creating a free demo account. Through this account you get to learn all the current forex news.