Why Should I Trade Forex?

<p id="isPasted">Forex is the largest and most liquid market in the world. A career as a forex trader can be lucrative, flexible, and highly engaging. Forex traders face high risks, leverage, and volatility.</p><p>Few of its pros are:</p><ol><li id="isPasted"><strong>Low Cost</strong>: Forex trading can have low brokerage and commission costs. Most forex brokers make profits from the spreads between forex currencies. In contrast, equity or other securities traders commonly have a brokerage structure that varies widely.</li><li><strong>Flexible Schedule</strong>: The forex markets are open 24/7, enabling trades at one’s convenience and advantageous to short-term traders who tend to take positions over short durations.</li><li><strong>High Liquidity</strong>: Compared with other financial markets, the forex market has the highest level of liquidity, which means even large orders of currency trades are easily filled efficiently without large price deviations. This helps eliminate the possibility of price manipulation and price anomalies.</li><li><strong>No Exchange</strong>: As an over-the-counter market operating globally, there is no central exchange for the forex market.</li><li><strong>Volatility</strong>: The major currencies may display high price swings. If trades are placed wisely, high volatility assists in enormous profit-making opportunities.</li><li><strong>Variety</strong>: There are 28 major currency pairs involving eight major currencies. Criteria for choosing a pair can be convenient timing, volatility patterns, or economic developments.</li><li><strong>Low Capital Requirements</strong>: Due to tight spreads in terms of pips, one can easily start forex trading with a small amount of initial capital, unlike other markets like equity, futures, or options. Margin trading with a high leverage factor (up to 50-to-1) is available for forex trades.</li><li><strong>Ease of Entry</strong>: There are many forex technical indicators for short-term traders and several fundamental analysis theories and tools for long-term forex trading.</li></ol>