Trading has grown enormously in the last fifteen years, and today anyone can trade, although trading is not fit for everyone.
While every market has its attraction, the advantages of trading Forex are pretty underrated. We are here to guide you through the advantages of the market and supply you with the knowledge you need to start trading currencies online.
Forex trading has become broadly accessible with in the last few decades, and now more and more people are starting to wonder what the main advantages of Forex trading are. Some of those people are familiar with the online trading through stocks. However, it is important to understand the advantages that the Forex offers compared to the stock market.
This article focus on the main advantages of the Forex market for beginners.
Advantages of Forex Trading for Beginners
You can start trading Forex with the relatively small amount of capital, and this is really one of the main advantages of Forex. While you may be required to deposit around $10,000 to start a trading stocks, you can quickly start trading currencies with a deposit of $100. For small size traders, this is one of the most important advantages of Forex.
Forex is the most liquid market in the World. There are a constant supply and demand for money. One of the advantages of Forex trading is that the market is open 24/5. It means that you do not have to adjust any schedule for the market opening hours, as you can trade all the day long. In normal market conditions, you can trade out of the positions with ease, as there are a constant supply and demand in the Forex market.
While the Forex as mentioned above advantages is quite important, selling currencies without acquiring them first is one of the main advantages of Forex trading. The main trading philosophy is to buy low and sell high, but with the Forex, you can sell high and buy low. In this way, you can potentially make profits on both the side downward and upward trends.
While it is possible to short stocks and futures, it is much more complicated to do. While, with currencies, you can simply sell the assets if you believe that the trend is downwards with just a single click.
When it comes to trading, the rule of thumb is the bigger your capital, the larger your trade size. Leverage is a powerful weapon in the armoury of Forex benefits. When employing that leverage, a trader can buy or sell up to 500 times more funds than he has. In this way, one can easily generate more substantial gains even without having a large capital at the disposal.
It is hard to encounter the whole set of advantages that come without any drawbacks, and Forex is no exception. Forex is the largest financial market in the world, and it is possible to expect the high degree of volatility. While the high volatility is great for traders, high volatility combined with high leverage may result in substantial losses. In some cases, may result in a loss that exceeds your deposit. This is why you should carefully consider Forex trading or seek advice from the expert before engaging.