14.8 C
New York
Saturday, October 1, 2022

What is FOREX?

What is FOREX?

The foreign exchange market, which is usually known as “forex” or “FX” Market which is the world’s most exciting and dynamic market.

With $4 trillion traded every day, it is also the largest financial market in the world.

In simple words it’s the global market that allows one to trade two currencies against each other.

If you think one currency will be stronger versus the other, and you end up correct, then you can make a profit.

Assuming you’re an American visiting Japan, you’ve sold dollars and bought yen. Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over and notice the exchange rates have changed.

It’s these changes in the exchange rates that allow you to make money in the foreign exchange market.

Advantages of FOREX Market.

So, why trade Forex? There are many reasons to trade in Forex.

If we ask four different people, you might get more than four different answers.

Primarily, making money is the most frequently cited reason for why trade Forex. Let us now consider the following reasons why so many people are choosing forex market.

Forex Market never sleeps.

The Forex market works 24 hours and 5-1/2 days a week.

Because governments, corporates and private individuals who require currency exchange services are spread around the world, so trading on the forex market never stops.

Activity on the forex market follows the sun around the world, so right from the Monday morning opening in Australia to the afternoon close in New York. At any point of the day you can find an active pair to trade.

Endless Profit Opportunity

A trader in forex can trade both ways. It means a forex trader can play the market and make profits irrespective of whether the market is going up, down or is in tight range.

So irrespective of the event that has triggered the movement – forex traders do not care.

High Liquidity:

The high volumes traded globally lead to high liquidity.

The big advantage of liquidity is that you can always find demand to sell or buy the currency pair
you wish. Forex is the most liquid market.

Low Cost:

Most forex accounts trade with little or no commission and there is no exchange or data license fees.
Generally, the retail transaction fee (the bid/ask spread) is typically less than 0.1% under normal
market conditions.

With larger dealers (where volumes are huge), the spread could be as low as
0.05%.No additional cost required.

Leverage:

Leverage is the mechanism by which a trader can take a position much larger than the initial investment.

It is one more reason why you should trade in forex. Few currency traders realize the
advantage of financial leverage available to them.

The high volumes traded globally lead to high liquidity.

The big advantage of liquidity is that you can always find demand to sell or buy the currency pair you wish. Forex is the most liquid market.

High leverage allows a trader with small investment to trade higher volumes of currencies and thus provide the opportunity to make significant profits from the small movement in the market. However, if the market is against your assumption you might lose a significant amount too. Therefore, like any other market, it is a two-way sword.

Accessibility

Forex is an internet based virtual market which is active 24/5. You can access it from anywhere in the world.

All you need is a Computer or Smartphone and internet connection. You can open/close trades from your phone. Which is super convenient.

Also, most of the brokers allow you to deposit and withdraw funds from mobile as well.

Follow us on TWITTER 👈🏻

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

373FansLike
28FollowersFollow
- Advertisement -

Latest Articles