There’s the stock market and there’s the forex market. The latter is considered a greater opportunity – if you know how it works and if you have the money to invest. Now there are many reasons why people flock to learn Forex trading inside and out.
But why exactly should you get into forex trading? Is there any truth behind the huge profit boom we all keep hearing about? These are a few of the main reasons why the Forex market is so huge right now.
Unlimited activity
The Forex market is open 24 hours a day on weekdays. Compared to other markets that operate at specific times and days, the Forex market is buzzing with activity and opportunities during the week. Investors can always react to specific changes and trends that occur during the week.
Freedom
This also means not being restricted by normal office hours; traders can operate at any time they wish. Naturally, this attracts people from different lifestyles, geographies and walks of life. If you have a laptop, then you can trade wherever you are.
Lower costs
Add to that the sheer liquidity of the market and the electronic way of trading, and then you have a feature that is sure to attract people: fewer transaction costs. We can ditch the traditional fees that add to your bill and focus only on the spreads. The spreads here are usually smaller than in other markets, which will mean better profits.
Leverage
Unlike other markets where leverage is small, forex trading allows for greater leverage, giving you the opportunity to trade up to 100 times your investment. Brokers have some features where they can give you a lot of leverage depending on the account. Of course, this also means a greater risk of losing money. Risk management can protect you from this.
Stable prices
Since your trades are done immediately, chances are that the price you see is the price you will get. Compared to other markets, your trades tend to close within a day or two, giving the opportunity for prices to slip and change. This stability and speed attracts many traders in this market. Your assets are not tied up for long periods of time, giving you more control.
High transparency
Being electronic in your trading and having liquid and moveable assets is easier to analyze and manage. Everything is accessible through your platform and laptop. Your trades can be executed according to your views and strategies. This gives you a better sense of market cycles and makes your predictions more accurate with each trade.
Consistent profit opportunities
Since your trades involve two currencies and not other markets and trends, there is always an opportunity for people to make profits. There is no bulldog observation of markets, commodities and sectors going up or down. Whether the market is bullish or bearish is not really something you need to worry about. What really matters is that you choose the right currency to trade in.
For logical reasons, Forex trading is considered to be perfectly competitive. Everyone is presented with an equal playing field. Even if the currency is falling, this only means that somewhere there is a currency rising and the opportunity for profit exists. The unlimited earning potential, freedom and equal opportunity make the Forex market an exciting opportunity for anyone.