The retail market of forex is starting to become more popular each day and this phenomenon makes us look for the answers to the following questions: “Why is forex so attractive to a lot of people? What makes them interested in trying to learn how to trade in the forex market?”
We are here to answer these questions for you. Continue reading to find out the reasons why people trade forex.
We will start off with an obvious one. Forex market size is unmatched and unprecedented by the all other global markets. There is actually an astronomic number of somewhere between two to five trillion dollars that is being traded in the forex industry every single day of the week!
This characteristic of forex market would definitely entice anyone and it would even cause an initial attraction especially to amateur traders. However, you may still be wondering what is keeping them interested in forex trading. It is because of the following five features:
The forex market, unlike any other trading market, is available and open to trading around the clock! You no longer have to wait for a particular institution to open for you to start earning money. You can also trade with currencies at the comforts of your very own home at whatever point of the day. If you are wondering how, you can look up reputable forex trading providers like CMC Markets.
The fact that forex is available and accessible anywhere and anytime is what makes forex trading the best platform for a retail trader. It is magnified even more because of internet’s rise in popularity. It is like everyone has access to it now – even our grandmas are on Facebook! If you have internet access and if you have an account on a forex trading provider, you can basically start trading no matter where you are.
This is just a direct result to the size of forex’s market. Unlike all the other trading markets, forex is just so huge that it can’t be affected by one single person, group or institution. What this means is that the retail trader is actually on the same position even with the biggest bank of the world when we’re talking about forex trading. If you still don’t know what this implies, you would be happy to know that the market of forex cannot be manipulated by anyone!
This one is the tricky bit. The forex market offers quite a unique characteristic to the simple retail trader: it does not need a huge sum of money before you can start trading gigantic accounts with huge amounts of currencies.
Almost all the forex brokers in the industry today would offer a leverage of a hundred to one (100:1) on your investment. We said that this part is tricky because it can also be a huge disadvantage to the forex market. For a retail trader, he or she would have an equal risk for loss to his or her opportunity to gain.
The forex market usually won’t stand still. It is almost always moving and it is always making large movements! High liquidity and large volume transactions combined with less trading instruments can generate greater volatility in intra-day trading. The currency market can then be exploited by its day-traders. With the most or even the relatively liquid stocks, its volatility are in the range of 60 to a hundred. For currency trading, its volatility is approximately at 500. This is yet another ultimately attractive feature for those interested in forex because they will be able to make an easy and quick buck out of it.
It is already obvious that you can potentially gain a huge profit from forex trading. However, there is still another element which is solely exclusive to forex: you can make profits no matter where the market is headed! If you compare it to stock market trading, you can see the difference because you can only make money once the worth of your stock goes up.
That rule does not apply with forex because you will still be able to get something even when your account is going down. You are working in pairs all the time with forex because it is a two-way market. This means that a currency would decrease and its pair would increase. This is mainly why there is always a high chance of profit in forex trading.