Forex Trading – What Makes It So Popular?
June 29th, 2009
Trading currencies in Forex is becoming more and more popular.We all know that Forex market is one of the largest markets. This fact alone makes it so attractive to many people to join trading currencies. The same fact makes brokers to advertise it everywhere to attract more and more clients. There are number of other reasons why people come to Forex.And why you need to learn Forex trading
High Return on Investment
The first attractive feature of this market is of course the high leverage. Leverage makes it possible for brokers to attract everyday people like you and me to open trading account with small funds. This is what makes it so unique. For example stock or futures market do not have such big leverages.
Many brokers will give you up to 100 leverage. Therefore having only $100 the leverage will allow you to control a mini lot of 10,000 units of currency pair. Do you see now how powerful this concept is. Tiny amount of money have a potential of big return.
Forex is the Largest Market
As I said before the first reason is the daily volume that is being traded. The daily amount of trades is close $4 trillion. Even though Forex does not have the central exchange there are banks and financial institutions that play major role in exchange. There are three major centers with such institutions: New York, London and Tokyo. Currencies of these three countries (US, Britain and Japan) are being traded the most.
Very High Liquidity
You are probably aware that trade orders get filled very quickly in most cases. This is still because of high volume that leads to large liquidity. You don’t need to wait long for the opposite order in the market.
Currencies are Being Traded Around the World
What makes Forex unique is that traders trade currencies all around the world. That’s one of the differences between foreign exchange and some other exchange markets. Currencies of many countries involved in trading. However some of them preferred more by traders than others. For instance Euro, Dollar, Yen and Pound have higher trading volumes than New Zealand Dollar for example.
Forex Can be Traded Any Time of The Day or Night
Since it is a global market the time when currencies are traded travels with the Sun from one country to another. That makes Forex open 24 hours a day. It closes only on weekends. Therefore you can choose your own time to trade. Also you can chose the time of volatility that you prefer. New York session is highly volatile and unpredictable for USD crosses. London session is also volatile but more predictable. And Asian session goes with much less volatility for US dollar pairs.
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