There are many advantages of engaging in the business of trading forex. Currently, trading currencies online for a living is gaining popularity all over the globe because of its many benefits.

The foreign exchange market (forex or currency market) has been opened to retail traders since 1999 and it offers several advantages to investors.

Due to its many benefits, many young and old traders have ditched other financial markets in favor of forex trading.

Here are 10 key benefits that currency trading will offer you:

 1. Relative ease of entry

When weighed against the other financial markets, the foreign exchange market has less obstacles to entry. The present explosion of interest in forex trading is largely attributed to this fact.

For instance, there are forex brokers that allow you to commence trading with as little as $50 in your live trading account. In addition, most forex brokers provide various common and easy methods of funding your live account.

2. Risks in online trading of currencies are easy to manage

In contrast to the common mistaken belief that currency exchange is a high risk business, the risks present in the forex market are easy to manage and even reduce considerably. Most traders throw in their money in the foreign exchange market when they have not thoroughly grasped the ‘ins’ and ‘outs’ of the market.

Thus, they are taken over by greed and end up losing their cash.  The risks in currency trading are easily surmountable when you adopt the correct policy and strategy for navigating the markets.

This is why this website was created to equip traders with the essential skills necessary to profitably participate in the forex exchange market.

3. Trade according to your convenience:

The currency market is open for 24 hours a day, apart from weekends. Commencing with the Asian session at around 24:00 CET Sunday evening and culminating with the United States session at around 23:00 CET on Friday evening, the foreign exchange market offers you the convenience of placing your trades based on your schedule.

Without having to wait for the opening bell like other traditional markets, trading forex gives you the advantage of placing your trades whenever you choose: morning, noon, or night.

4. Forex is the biggest financial market in the globe

Boasting of a daily turnover of over $4 trillion, the forex market is able to absorb trading sizes that dwarf the capacity of the other financial markets. The high level of activity in the market provides several benefits to traders.

Some of these are that it makes it possible for investors to take advantage of exchange rate fluctuations for speculative purposes, it acts as a check on market pricing vacuums wherein wild price swings can occur, and it leads to lower transaction costs.

In addition, the high liquidity leads to a certain extent of orderliness in the market because no one person or single institution or state can dictate the direction of the market for an extended period of time.

5. Online forex trading has high level of leverage

The ability to enter trades with a large sum of money than what is available in your trading account is a great moneymaking tool in the business of trading currencies.

Leverage in forex trading enables you to amplify your profits even if you have little cash in your trading account. Currently, most forex brokers offer high leverage to their clients, up to 500:1.

As an example, if you are using a broker providing a 50:1 leverage, then you are able to control a trade worth $50,000 with only $1,000 of capital in your account.

In the foreign exchange market, prices of currencies only fluctuate by a very small amount. Therefore, if you use leverage properly, you can harvest huge profits from this business.

6. The forex industry is highly regulated

There are numerous regulatory and supervisory bodies around the world that endeavor to weed out malpractices in the world of forex trading. The most prominent ones are the National Futures Association (NFA), Commodity Futures Trading Commission (CFTC), Australian Securities and Investment Commission (ASIC), and Financial Services Authority (FSA).

Therefore, before you invest your hard-earned cash in fx trading, it is important to counter check with your nearest regulatory agency if your preferred broker is reputable or not. This will prevent someone from eating your sweat.

Click and read this link to know how to choose the best broker: How to Choose the Best Forex Broker

7. The currency market is highly predictable

Even though the forex market tends to be volatile in nature, prices usually repeat themselves in foreseeable cycles. Therefore, with a good strategy for navigating the markets, you can study these patterns to identify the best opportunities for entering and exiting positions.

In contrast to stocks, prices of currencies seldom get stuck in tight trading ranges. More so, they have the tendency to develop strong trends; thus, with adequate education and training, you can easily pin point new trends and breakouts and benefit from them.

More than 80 per cent of all the transactions in forex trading are speculative in nature. This implies that the market habitually overshoots and then corrects itself, and this offers many opportunities to savvy traders.

8. Instantaneous order execution and transparency of the market

Forex trading is carried out through the over-the-counter method (OTC); therefore, execution of orders normally takes place in just 1-2 seconds. Markets that do not provide instantaneous execution of orders may compromise your profits.

In the business of online trading of currencies, there is absolute transparency because what you see is what you get. This is due to its high liquidity that guarantees openness in all transactions taken.

However, the other traditional financial markets are often filled with obstacles such as slippages, open-outcry pits, inconsistency of floor brokers, etc.

In currency trading, order execution is all-electronic and trades are placed on the trading platform at the click of the button.

9. It offers equal potential to benefit regardless of the market direction

Sincethe prices of currencies are usually quoted in pairs, forex trading involves buying one currency while simultaneously selling the other.

For example, when you place a buy order on EUR/USD, it implies you are buying the euro while simultaneously selling the dollar, and vice versa.

As the market moves, one currency will appreciate in value against the other; therefore, there are no constraints for directional trading.

It is up to you to do analysis and identify the right currency to either buy or sell. As such, you can harvest profits both in rising and falling markets.

10. Low transaction cost and no commissions

In currency trading, basically the cost of entering and exiting trades is built into the price, and this cost is referred to as the spread.

The spread represents the difference between the buying and selling price, and it is how forex brokers receive compensation for their services. Generally, spreads are usually low in the fx market.

When you trade forex, you will not be charged commissions for entering and exiting positions. Therefore, you will be able to reduce your transaction costs for each position you enter.

Conversely, in other traditional financial markets, you will be required to part with both commission and exchange fees for entering trades.

Summary

Forex trading offers excellent opportunities for all types of investors. Therefore, you should consider currency trading today as a full time or part time business.

Visit this link to review some of the best brokers that can help you achieve your dream. Do not be left behind in this investment boom!