Trading has extremely advanced in the last few years and as such, more people can trade, given the emergence of easier access to such opportunities. When considering the possibility of becoming a trader, one of the first questions you should ask yourself is, "what market should I choose?"
Granted, the commodities market has had a tremendous economic impact on nations and people from energy, metals, agriculture to livestock. In fact, trading commodities has recorded favorable long term returns especially for categories such as precious metals which can serve as a hedge against high inflation or during periods of currency devaluation.
You may think about metals, indices, energies or other trade commodities but while every market has its own attraction, the advantages of trading in Forex shouldn't be overlooked.
Forex trading has continued to become a main source of income for those that enjoy online financial investing. Over the years, many people have managed to conduct successful trades and have enjoyed the benefits of this active market. Due to the ease of accessibility to Forex trading within the last few decades, more and more people are starting to wonder what the main benefits of Forex trading are. Some of those people are familiar with online trading through stocks, however it is vital to understand the advantages that Forex offers compared to the stock market.
Let's go through a guide on the main benefits of this market and supply you with the knowledge you need to start trading forex online.
You can start trading Forex with a fairly small amount of capital and this is actually one of the main benefits of Forex. While you may be required as a prerequisite, to deposit around $10,000 to start trading stocks, you can easily start trading currencies with a deposit of $100. For small size traders, this is one of the most important benefits of Forex. Furthermore, Forex trading takes place on many different exchanges across the world, and as a result, investors can make currency trades 24 hours a day during weekdays, unlike any other trading market. One can even trade currencies from within the comforts of your home from anywhere, thanks to the internet.
Unlimited demo account
Contrasting many other providers of financial services, Forex brokers let you preview their services and test your trading knowledge on a practice-demo account. This way, you can trade paper money while experiencing real market conditions. What is best is that there are no restrictions applicable for this account, you can trade for as long as you need.
Better technological innovation is definitely one of the most important benefits of Forex trading. While most futures and stock brokers service you with platforms and software that was developed years ago, Forex brokers provide the latest trading platforms. In addition, there is also a great amount of third party software suppliers that provide useful trading extensions.
While all the above mentioned Forex advantages are quite important, selling currencies without purchasing them first is one of the main benefits of Forex trading. One of the main trading philosophies is to buy low and sell high, but with Forex you can also sell high and buy low. With this, you can make profits on both downward and upward trends. Whilst it is possible to also do short trades within stocks and futures, it's much more complicated, whereas with forex, you can simply sell if you believe that the trend is downward, with the help of just a single click.
When it comes to trading, the bigger your capital, the larger your trade size. Foreign exchange markets give investors a lot of leverage when trading. In other words, a small amount of capital can go a long way. A trader can buy or sell up to 500 times more funds than he actually has. This way, you can easily generate more substantial gains (or losses) even without having a large capital at hand. In fact, some markets allow a leverage ratio of up to 50:1 or 100:1. In other words, a single dollar can be worth up to $50 or $100 when trading. This means that you can earn a lot of money with a relatively small investment.
Attractive Loyalty programs
Most service providers are expensive. They supply you with non-negotiable trading conditions and they hardly give anything back to the clients. However, with special reference to Forex brokers, you can expect a dedicated account manager who is always there to help and assist you. Next to it, you are provided with attractive loyalty programs that can compensate you for every transaction that you make.
Above are the main Forex trading advantages and benefits. Of course there are more, but the aforementioned ones are the most important, especially for the rookie trader. Forex has lots of extras to offer and trading it will show you a whole new realm- where technology has no limits and the possibilities are endless.
However, while most people are quick to delve into different types of trading, it's advicable to first obtain knowledge about a certain category of trading before starting. By accessing educational platforms like Easy Market's learn centre, you'll be saving yourself from future harm and also make better decisions when it comes to trading with your money.