Advantages of Forex

There are numerous benefits of trading forex. We will outline few of them right here and now:

You Pay No commission

Forex Market requires no clearing fees, no exchange fees, no government fees, and no brokerage fees. Most retail brokers are compensated for their services through something spread.

There Is No Need For middlemen

Spot currency trading totally eliminates the activity of middlemen. You have direct access to trade with the market responsible for the pricing on any currency pair.
So, why the middleman? It’s of no use lol!

The Lot Size Are Not fixed

In the futures markets, the contract sizes are determined by the exchanges. For silver futures, the standard-size contract 5,000 ounces.
But in the spot forex, you determine your own lot, or position size. This allows you to participate even with little accounts of mere $25.

There Is Low transaction costs

The retail transaction cost (Spread= difference between bid/ask price) is relatively less than 0.1% under normal market conditions. At larger dealers, the spread could be as low as 0.07%. This strictly depends on your leverage. We will talk more on this giant killer called leverage later.

It Is A 24-hour Market

The market is open from Monday morning opening in Australia to the afternoon close in New York. The forex market never shut down.
This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade: morning, noon, night, during breakfast, or in your sleep.

No One Can Corner The Market

The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank of the world, if there is any) could control the market price.
I’ve heard people push the blame of their bad trades to their broker, claiming they cornered the market.
I don’t believe this but BAD brokers could manipulate the feed and gives you wrong price (passed price). That’s why you must do your proper research before making your choice of broker.

You Have Your Hands With Leverage

In forex trading, a small deposit can control a much larger total contract value. Leverage gives the trader the ability to make good profits, and at the same time keep risk capital to a minimum.
For example, a forex broker may offer 50:1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $2,500 worth of currencies.
Calculated as Deposit x Leverage= Amount controlled.
In this case, $50x50 = $2500
Similarly, with $500 dollars, one could trade with $25,000 dollars and so on. Do the calculation yourself if we are right.
While this offer looks attractive, always remember that leverage is a giant killer in forex. Leverage can lead to huge losses as well as profit without proper risk management.
Don’t pursue the luring gift of great leverage by brokers. Learn to manage your risk properly.

The Market Has High Liquidity.

You can enter a trade (buy or sell) right away just at a click of a button under normal market condition, as there are usually other traders willing to take the opposite side of your trade too. This makes the spot market highly liquid because market is huge and has millions of participants.
Nothing can hold you back on a trade. You can even chose to set your trades to run automatically. In this case, your position closes when your profit target is hit (limit order) OR your trade get closed when price goes against you (stop loss order).
You see! Forex is great!!

There Is Low Barriers to Entry

Getting started in foreign exchange would never demand huge capital. When you compared forex to stocks, options or futures, the amount of investment required is so minute. Brokers offer "micro" and “mini” trading accounts, some with a minimum account deposit of $25 0r even $10.
This makes trading forex more accessible to the average individuals who have a very small start-up capital to trade.
I still reject the idea of starting with the bare minimum.

You Can Get Freebies Everywhere

Most online forex brokers offer "demo" accounts for you to practice trading and build your skills, including live forex news and charting services.
All this comes to you in handy for freee!!!!!!!!
Demo accounts are great resources for those who cannot afford the starting capital at the moment and would like to test their trading skills with the demo before opening a live trading account and start bearing the risk.
Please DEMO TRADE for at least 3 months before trying out with your real money. It’s very important.
We have talked about stocks and futures in a nut shell. But for the purpose of being at ForexTowers.Com (to study forex Trading), let’s try to compare the duos with our subject matter.