For a long time, currencies have been one of the most popular asset classes to trade and forex trading continues to grow in popularity. This does not come as a surprise to veterans who have been beneficiaries of its consistent growth for over a decade.
Initially traders might be attracted to forex trading because of the size of the market. Forex trading provides an opportunity to gain access to the $5 trillion traded daily, which is a deciding factor for many. This huge market size, which is the world’s biggest market, facilitates quick and easily executed trades, thanks to the high levels of liquidity. Furthermore, high levels of volatility provide opportunity for potential profit.
These opportunistic conditions are further enhanced by the accessibility of the forex market. You can trade forex 24 hours a day, 5 days a week meaning that no matter what time of day, there will be an opportunity to trade. Furthermore, the potential to make a profit is increased by the fact that you can make money irrespective of whether the currency is moving up or down.
Traders of all levels will find themselves accompanied by the mechanics of the market. The leverage offered by brokers gives traders with small capital the capability to trade large quantities. Traders who do not wish to be exposed to that amount of risk will find mini and micro trading that can be started with a minimum of $25. Cost barriers that obstruct entry to most markets are not as large in forex trading. Commissions are non-existent and transaction fees are low. With costs at the lower end of the scale, profits are easier to come by.
Another benefit is that the forex market is decentralised, its size prevents any one individual or institution from determining the market. The common knowledge available puts an individual with accurate analysis on the same playing field as a large bank. An extremely important point if you wish to feel that you have a fair chance at trading.
The mechanics of the forex market will ensure its popularity. Going forward, we could expect to see forex trading increasing in popularity as new technologies come into play. Developments such as electronic communication networks and expert advisors show that the market’s potential is unlimited.
If you are interested in trading currencies be sure to choose a regulated forex broker. Vantage FX is an award winning Australian broker, regulated by the ASIC. They are a true ECN broker, providing their clients with the best execution and some of the tightest spreads in the industry.