10 Surprising Facts about Foreign Exchange Market

Facts about Foreign Exchange Market

The foreign exchange market is the World largest market with the average daily turnover rates of more than $4 trillion. This huge decentralized market has rapidly expanded in size and popularity over the years, mainly due to the many technological changes that have been experienced in the past decade. These changes have given millions of international traders of every level and backgrounder the opportunity to access the forex market and place forex trades. Here are the surprising facts about foreign exchange market you must know when you trade Forex.

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10 Surprising Facts about Foreign Exchange Market

Foreign Exchange Market

1. Size

Forex is the largest financial market in the world, trading at a large 5.1 trillion US dollars in a single day. Because of its huge size and liquidity, there is always a ready buyer and seller to transact anywhere and anytime.

2. 24 Hours Market

Forex is a global market that trades 24 hours a day, five days a week. That makes it possible for you to set your trading hours. Most activity takes place between the time the New Zealand market opens on Monday till the US market closes on Friday evening. In the GMT+8 time zone like Singapore, Malaysia and Shanghai, it means that the Forex Market is open from 5 am on Monday to 5 am on Saturday every week without fail.

3. Small Transaction Cost

There are no commissions charged in Forex, and only a small transaction fee called a spread. It is not possible in any other market, as brokers charge a commission on each trade in all other markets. The spread in a Forex trade is less than 0.01% of your account size.

4. Free Accounts and Free Tools

Most online Forex brokers offer free demo accounts along with the breaking Forex news. A demo account means two things: Firstly, it is virtual money. Secondly but more importantly, it displays live prices. These are helpful resources for traders who would like to hone their trading skills with virtual money before starting a live trading account.

5. Profit Both Way

Profit potential exists in forex regardless of whether a trader is buying and selling and regardless of whether the market is moving up and down. It can happen because of a forex trade involve the buying of one currency selling of another simultaneously essentially trading in currency pairs.

Example includes AUD/USD, EUR/USD, USD/JPY, and NZD/USD. This unique setup allows a trader to buy and sell anytime and anywhere, thereby presenting an opportunity to make money anytime.

6. High Leverage in Forex

Brokers provide exceptional levels of leverage in Forex. It can go as high as 400 times the trader’s investment. Example, leverage of 500:1 would allow an investment of USD1000 to control up to a USD500, 000 worth of currencies. Leverage gives the trader the potential to rapidly increase the size of his account while keeping risk to a minimum.

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7. Online Access

With the advanced technology and the Internet all a person needs to get started trading in forex is two things:

  1. A mobile or laptop device
  2. An internet connection

With the cheaper and readily available internet access all over the world, trading the forex market has genuinely become simpler and more robust to every person wanting to start a financially rewarding journey.

8. Low Account Minimum

Individuals can open a live trading account (Trading Courses) with small amount USD200. Budding traders have the choice to start with a small and increase the size of their account rapidly through the power of compound interest. It allows the trader to learn the real chapter on the forex market without risking the high capital.

9. Limited Government Regulation

There is virtually no government weight in the Forex market because Forex is considered an OTC (over the counter) market. This means that there is no central exchange or location for traders to meet. Forex transcends all the cultures and national boundaries because it is traded on the internet.

10. Equal Access to Market Information

Despite the introduction of real execution regulations in Europe and the US, many people would agree that professional traders and analysts in equity market have a large competitive benefit in comparison to individual traders. In Forex, however, perhaps the only advantage the big banks have is flowing information.

The largest financial market in the world offers vast opportunities for traders who take the time to get to understand it. This 10 surprising facts about foreign exchange market you must know when you trade Forex market.

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