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Advantages of Trading Foreign Exchange

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Foreign exchange has been there since the medieval times when the Medici family started it off in Europe. And in the modern period, forex trade got a new lease of life when the value of the U.S. Dollar (USD) decidedly slowed down in 2002. It’s easy to see why people would be hooked to foreign exchange trading—it’s easy, it’s convenient and chances of ending up with a profit are considerably high. To sum it all up, a forex market is that place where you trade with the extents to which the exchange rate of a particular currency pair would fluctuate. For further clarification, the differences between the existing exchange rates in a particular international currency pair changes hands in accordance with the prevailing exchange rates in the market. The foreign exchange (or forex) market offers a host of advantages to any. Boasting of hugely superior leverage and liquidity than most places, the foreign exchange market is one of the best financial investments that one could fine. Keep reading (points from Easymarkets):



  • Trading Costs are Extremely Low: It is possible to start out with any capital amount in the field of forex trade. One doesn’t require a big initial amount (you can start off with as low as a hundred dollars). Due to this, even small (including single-person) investors can etch out a good living from trading in the forex. And because the costs are lower, the risk is also proportionately low. Likewise, there’ no concept of commission fees is there in the online forex trading.
  • It Boasts of Great Transparency: Information on trading forex is available 24/7 on the internet, for free. The huge transparency of the forex market makes sure that all traders and brokers are informed properly about the impact that a trading decision can have. They would be completely guided by the analysts, charts and advisors. Instances of fraud are also rarer in the forex universe.
  • Has Great Liquidity: There is a wide array of choices when it comes to modes of trading, time-frames and currency pairs one would like to trade in. The market boasts of supreme liquidity, which enables the traders to easily exchange currencies without affecting the actual prices of the currencies. Therefore, regardless of your trading volume, you can be assured of currency prices remaining stable during both the order-placing and executing times.
  • Has Very Strong Market Trends: One can always rely on getting the perfectly accurate market data and can take the help of free and paid signals and robots to analyse the market and price movements. Forex traders rely heavily on trends and trending to predict the direction of the forex market. Other financial markets use trends and trending too, but these are far stronger and effective in the foreign exchange market. Owing to strong trending, forex markets are quite simple to analyse and the identification of probable lock-in points are easier. 

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I agree with forex Has Great Liquidity and Trading Costs are Extremely Low. But for the others i have mixed response. First, It boast transparency which sometimes true but at the same time is not since it gives us anonymity and some brokers even able to create their own market. While Strong trend is sometimes true and sometimes not. Usually strong trend happening after big news and up  to few hours later, but if there is no fundamental aspect it is rare to see strong trend in forex even still quite volatile.

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