6 Best Reasons Why Forex Market Is Still the Best Place to Trade in 2018
by Andrew McGuinness jul. 16, 2019
In your Trading 101 class or online course you most likely learned some of the basics of forex trading – it is, after all, one of the most popular things to be trading in the 21st century. Forex is, by a significant margin, the largest market in the world to trade. This makes sense of course, given that the forex market encompasses all the liquid cash currencies in the world.
It’s also the most liquid market to be trading in the world, which comes with its own sets of pros and cons. It wasn’t until the 1990s that forex trading became accessible to the average investor, and now it’s one of the best things to be a trader in.
1) High levels of volatility In most investments, you are going to want to not be in a market that’s too volatile as you’ll have learned in your Trading 101 research. This is different in the forex world as most of the money is made when fluctuations hit the market. The higher a market’s volatility index is, the most opportunities you’ll have to acquire a currency for cheap as well as sell it for a higher price to profit. This is only amplified if you know how to use your broker’s leverage well.
2) Highly accessible It’s rather easy to get started in forex trading. The barriers of entry compared to most other stock markets are rather low. You can start a forex brokerage account with as little as $100 to your name. Most other markets aren’t recommended for entry until you have a cool $5000 lying around to start investing with. Almost all forex trading is done online so all that’s needed is a computer and an internet connection. Another factor that adds to accessibility is that forex can be traded 24/7 as global markets open and close all the time.
3) Highly regulated One of the reasons why forex trading is a great one to get into is due the high levels of regulation that make scramming and other unpleasant occasions an extreme rarity. Almost all reputable brokers are regulated by more than one authority, giving them legitimacy.
4) Plenty of available education materials The trading industry as a whole has plenty of educational material floating around that beginners can learn from for free – and the same is true for forex. There are more tutorials online and guides to help someone get started than one person could realistically read on their own. It is also extremely easy to open a new demo account online to practice on to see if it’s right for you.
5) Large communities available online As forex is one of the largest markets out there, you’ll have an easy time finding a community online to be apart of. These communities are great for discussing investing strategies, asking beginner questions and dissecting recent news with. There are many experts, analysts and experienced traders online you can easily interact with to enrich your forex trading experience – perhaps you can even find a mentor willing to show you the trading ropes.
6) Flexible options Forex allows for some creative trading. There are all types of trading strategies available. Whether it’s trading on margin by using leverage, placing call and put options, betting on futures – all of these and more are possible with forex. Leverage allows traders to take with money they don’t have, which can really amplify the profits for someone who knows what they’re doing. Of course, it can also do the same to losses, but that’s a risk worth taking when the potential returns are this high.