No Wonder Why Many are Hooked in FOREX Trading

Foreign Exchange or simply known as FOREX is the trading of currency in global market. The beauty about this market is the fact that it is remarkably liquid coupled with incredible daily trading volume. As with other investments, FOREX trading isn’t for those who have weak stomach. Having said that, FOREX market brings unique benefits compared to other known markets. This is after learning and mastering the basics of course.

FOREX is Literally Open 24/7

Given the reason that FOREX market is global, rest assure that trading is non-stop. So long as there is a market that is open, a trade is taking place. Trading begins in US when first big market opens in Sydney, Australia at 5pm EST on Sunday. Then, trading would end for the week as soon as the last major market in New York , closed at 5pm on Friday.

Liquidity is Unimaginably High

Say for example that you will be using loan for lawsuit as your main method of investment, then it’ll be worth it! This is for the fact that it has high liquidity. It’s the asset’s ability to be turned into cash quickly.

In FOREX, high liquidity indicates that big sum of money could be easily moved in and out of currencies with small spreads – differences between bid prices among potential buyers as well as ask prices for potential sellers.

Low Transaction Costs

The transaction costs are oftentimes built into price in FOREX market in form of spread. FOREX brokers then take home the spread as their fee or payment for being the facilitator of the trade. Spreads are then measured in pips. In most currencies, pip is the 4th place after decimal point or 1/100 of a percent.

When it comes to FOREX trading, say that the bid price falls on 1.3244 and asking price was 1.3246, then the spread for transaction was 2 pips. Brokers may be charging commission either based on percentage of amount of transaction or a flat fee. This will depend largely on the broker you are discussing about.

Leverage the Market

FOREX brokers are usually allowing traders to perform buy and sell in market by taking advantage of leverage. This has given them the capacity to trade with higher sum of money than what they actually have in their accounts. If you’re about to trade 50:1 leverage, for example, you can trade 50 dollars for every dollar that’s stored in your account. It may be small but if it’s viewed on a different angle, you can possibly control trade of 50,000 dollars even with just a thousand dollars capital in your account.