With so many people worldwide trading forex including private individuals, multinational firms, banks. Why is it essential for you to become a forex trader?
You must have heard diverse opinions about forex, futures and stock trading. With some giving it plaudits, others rubbishing it, and some just indifferent. You must then decide for yourself what you want and how best the forex market helps you achieve those dreams. Therefore, below we will be highlighting some numerous benefits of forex, futures and stock trading to help you make a more informed decision. Note that this is not to sway you in any way, as the FX market has risks you must be willing to bear. So, let’s get right into the discussion.
Would you imagine that such a liquid market such as the forex market does not charge commissions? Well, it’s true, forex trading is free of commission fees. Yes, you will be exchanging currencies, commodities and stock virtually, but with no charges. Neither is there any government, clearing, or brokerage fee.
You might be thinking; this sounds too good to be true. How then do brokers make money? Well, retail brokers make money from what is known as spreads, which are applicable when you execute a trade. But these are not significant fees that limit your chances of making a profit.
Best Pro Trade Dynamic Lot Size
Unlike several other markets, forex, automated futures and stock trading provides a very dynamic lot size system. Where even the private retail trader can choose the lot size, they desire to have each trade executed. In simpler terms, the forex market doesn’t restrict the amount you place on a particular transaction. It gives you the flexibility to even go as low as 0.01 lot size on a trade.
Note: The higher the lot size, the higher the profit gained, but also the higher the risk taken and vice versa.
A 24 Hours Market. Best Pro Trade
You have likely heard that the forex market never sleeps. Well, this is true. In forex and electronical futures trading, there’s no waiting on an opening bell like the stock market. With diverse trading sessions that open several times across the day, the FX market is open 24 hours on weekdays. It only takes a rest on weekends.
This gives forex and futures traders flexibility, as you can choose when you want to trade. You can work during the day and trade at night. You can trade during lunch breaks right before you sleep. Or even at night.
No One Owns the Market. Best Pro Trade
The forex, futures and stock market is so broad and liquid that no single entity can tremendously manipulate the market for an extended period. Indeed, people say big banks control the market. But the foreign exchange market is a trillion-dollar market with such broad participation, that manipulation during a live trading session is almost impossible by a singular entity for extended periods. The forces of demand and supply have to come into play.
Leverage is like means of a broker giving a trader more money to trade in the foreign exchange market. The meaning of leverage is to multiply your capital to provide a higher margin for profit. With leverage, as little as $10 can trade forex.
Brokers are in charge of offering leverage, and it differs from broker-to-broker. Some provide higher leverage, while some provide moderate leverage. Leverage of 50-to-1 turns your $50 capital to $2500 to trade the market. But be careful, because a higher margin of profit also means a higher risk of loss in forex.
Little or No Barrier to Entry
Entry into the FX and futures market is very flexible. The forex market is so accessible that some online retail brokers offer trading accounts with a minimum balance of $10 or $50.
Regardless of the tremendous benefits that accompany forex, futures and stock trading, including the instant buy/ sell of currencies at a click, it comes with risks. Forex is very volatile in that one can lose total capital invested. It doesn’t guarantee a 100% profit. So, only enter at your discretion, being aware of all risks involved.