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Benefits of FX Trading


Benefits of FX Trading

The appeal of the FX market when compared to conventional forms of trading is based on a number of distinct advantages that the former has over the latter. Around the world, there has been an influx into the FX market and today it is the largest trading platform globally.

Low capital investment

Perhaps the biggest appeal of the FX market is the way it is able to absorb almost every kind of trader in a non-discriminative manner. From the seasoned trader who has millions at his disposal to the newbie who can only risk a few bucks, the FX market caters for all those needs. For the upstart who might either be financially challenged or unwilling to commit a lot of funds to trading, there are companies that allow traders to participate with as little as $25. It is hard to imagine any other trade where an investment that low can get one started.

Trade from anywhere, anytime

Equally appealing for the FX market is the fact that you can participate in it from anywhere in the world on a 24-hour basis. This is especially ideal for most traders who participate in the FX market on a part-time basis as it enables them the flexibility of pursuing their careers and hobbies while sparing some time for FX trading.

The power of leverage

No other trade enables traders to exercise control over the market with very little investment as does the FX market. Leverage varies from one company to another but it basically enables the trader to trade using money that is not held in his or her account. Where the leverage is 60:1, for example, the trader is able to trade with amounts sixty times the amount held in his or her account. If the trader has deposited an amount of $2000, he will control trade worth $120,000.

Low transaction costs

Most traditional forms of trading have many hidden costs that eventually end up eating into the profit that the trader was likely to make. From trading fees to brokers’ commissions and funds transfer fees, the list could be mind-boggling. Not so in the FX market. With a few exceptions, most FX brokers offer a commission-free service and do not charge any fees when the trader has to withdraw funds. The fact that FX trading is carried out in real time frees traders from all the transaction fees that other traders normally expect. This not only makes FX trading potentially highly profitable but it also aids in the trader’s decision-making process in addition to improving transparency.

FX Trading is not completely unpredictable

For a new trader, it might sound surprising to learn that FX trading is not 100% speculative. In fact, there are trends that currency prices build over time and these provide an indication of what to expect from the pairings a trader chooses. Gurus in the trade have developed advanced tools that both veterans and new traders use to enable them trade with a considerable measure of confidence.