Why Should You Trade Forex Market? - Currency Trading Article

By:Nofie Iman

Simply said, there are no other trading instrument comes even closely to forex market when it comes to liquidity, 24hr market environment and last but not the least, profit potential. Forex (currency) market is the largest (most liquid) financial market in the world, with an average daily volume of more than US$ 1.5 trillion, which is more than all of the global equity markets combined.

There are also many other benefits and advantages to trading forex. Here are just a few reasons why so many people are choosing this market as a business opportunity.

1. Liquidity

Forex market is so large and also extremely liquid. This means that if you click a mouse, you can instataneously but and sell at will. You are never "stuck" in a trade. You can even set the trading platform to do this automatically. For example, close your position at your desired profit/loss level.

2. Leverage

A small margin deposit can control a much larger total contract value in forex trading. Leverage gives trader the ability to make extraordinary profit and keep risk capital to a minimum at the same time. Some forex firms offer 200 to 1 leverage, which means that a $50 margin deposit would enable a trader to buy or sell $10,000 worth of currencies.

3. 24 Hours

Forex market never sleeps. Forex trading day starts in Wellington, New Zealand followed by Sydney, Australia, Hong Kong and Singapore. Three hours later trading day begins in Dubai (UAE) and other Middle Eastern countries. In couple of hours they are followed by Frankfurt, Zurich, Paris, Rome, London is the last one to open in Europe and five hours later it is followed by New York, Chicago and finally the West Coast. This is very desirable for those who want to trade on a part time basis, because you can choose when you want to trade: morning, noon, or night.

4. Profit in Two Ways

On the stock market, you can only make money if shares are rising and the economy growth. Forex is little bit different. Forex has the ability to generate profits whether a currency pair is up or down. A trader can profit by taking a "long" position or a "short" position. For example, if you think the USD will increase in value against EUR, then you will buy Dollar and sell Euro (long). But if you think the EUR will increase in value against Dollar, then you will sell Dollars and buy Euro (short). As long as you pick the right direction, a potential for profit always exists.

5. Low Commission Fees

One might think that getting started as a currency trader requires a lot of money. The fat is, it doesn't. Online brokers/dealers now offer mini trading accounts with a minimum account deposit of only $200-$500. They also offer very low commision rates. This makes forex much more accessible to the average individual, without large start-up capital.

6. Free Demo Account, News, and Resources

Most online brokers/dealers also offer free demo accounts to pratice trading without using "real" money, as well as breaking forex news and charting services. These are very valuable resources for traders who would like to practice and hone their trading skills with virtual money before really opening a live trading account.

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Article keywords: forex, trading, money, exchange, currency, investment, fund, foreign, market, stock, success, dollar

Article Source: http://www.articles2k.com

Nofie Iman is a full-time investor. He has been researching investment strategies and make his own living. You can learn more about his techniques at here.

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