Billions of traders nowadays choose Forex Trading since most come to a comprehension of why Forex is the best market for trading. Most of these traders are able to explore and take advantage of all the opportunities available in the online trading market. But what makes it really the best market to trade in? There are tons of reasons why it is the best but we have compressed the essential reasons for you, but of course, before moving forward, we are to look into where Forex trading came from.
What is the Forex Market in 2020?
The foreign exchange market or Forex as known to most people, is the biggest and the most highly liquid market in the world. Together with the development of the internet, retail clients are now able to trade Forex online through different online trading platforms. Opening in the late 1990s, Forex welcomed its doors to retail clients and online brokers started their operations. Despite Forex already operating even before that time, it only became accepted by institutional clients right after the developments and currently there are over trillions of US dollars daily trades in Forex.
So how do most traders make a lot of money online? You as a trader acquire an asset for a price that must be favorable for you, and project and expect to get rid of these assets. The more volatility is present in the market, the more opportunities there are to get new assets and sell the assets you have as holding on to your assets when the market does not move does not make any sense at all. You can often see a 50-100 pips change when the forex trading market is volatile. Volatility is a benefit to traders, they always look for markets that are volatile and use that as an edge to earn more profit.
Buy low and sell high: That is the most basic of all rules when it comes to trading. You can sell assets even if you don’t owe that particular currency. Let’s assume that you have 1,000 EUR and you are looking into trading with the USD/JPY pair. While your actual account balance is in EUR and without actually purchasing either USD or JPY, you can simply go short on this pair without owning Yen or Dollars. Such an option present in trading tells us that Forex is a great market to trade. You can trade Forex on a margin, which implies the use of leverages. Doing so would mean that you are able to trade with bigger mounts compared to what was your deposit. This is a huge advantage for you as a trader but also potentially gives you a disadvantage as a trade can also go against what was expected.
Forex trading is very accessible for those who would want to start trading as it is accessible for everyone starting out given that you can engage in it for as little as $100 USD. Even if the Forex Market is volatile, it is still possible to catch a lot of market moves. In comparison to other markets, there is definitely low capital required in Forex. What is also about its accessibility is based on the fact that anybody can easily sign up for an account from your PC or in your smartphone as most brokers operate online. All you will need to do is register, fill up documents for submission and deposit on your trading account! Very simple indeed! And even if you are a very inexperienced trader, a lot of forex trading demos can be accessed by any novice and learn using accounts for practice before actually pursuing the real thing.
A vital thing for traders are trading conditions. More often than not, traders experience only one or two pips spread on this market. The Forex infrastructure is well-developed, and execution of trades is much smoother and simpler and can be done online through your smartphone or PC. Trading Forex is an exciting, and very educational process as not only does it provide you with an opportunity to make trades online, but it also educates you on worldwide events.