Why Is Forex Trading Such a Global Phenomenon?

In case you’re still in doubt, the forex trade is the biggest industry in the world. It has a humongous daily turnover of over 4 trillion dollars(Which industry does that?) . In other words there is enough money to go around for everybody. Before I make a case for why the forex trade is popular is so popular, let me sound a little warning. Forex is a high risk business. You cannot trade as if you’re playing the lottery. You’re pretty much your own CEO, and you need to treat the forex trade as a business. Failure to do so could cost you dearly on the market.

So why is forex trading such a global phenomenon?

Cheap Trading Costs
Unlike the stock exchange, cheap trading costs is part and parcel of the forex trade. You don’t need to deal with headaches such as clearing fees, exchange fees, no government fees, no brokerage fees, et.c. You only need to pay the difference between the bid and asking price(or bid and ask spread).

No Middle Men
For some of you who are worried about intermediaries pinching some of your profits from your trades, I’ve got some good news for you: “NO MIDDLE MEN!” The flexibility of the forex trade makes middle men totally useless. You can trade directly with the market without the interference of middle men.
You Determine Your Own Lot Size
Unlike future markets where lots are determined by exchanges between traders you determine your own lot size. This frees you to open accounts as small as $250.

The Forex Market Never Sleeps
Just like Las Vegas, the forex market never sleeps. As a matter of fact, the forex market never sleeps. From Sunday evening to Friday afternoon, traders are around the world can be seen hammering away at their laptops and other hand-held devices. This arrangement is perfect in that you can choose to trade full-time or part-time depending on the time of day that suits you-morning noon, or night. Since the forex trade is not a 9-5 arrangement, you can set trades at any time, be it day or night.

Long Or Short
Unlike other financial markets you can go long or short on your trade, depending on the leverage of your trade. If a currency goes up, you buy it. If the value of a currency goes down, it only makes sense that you sell it to avoid incurring a heavy loss.
Incredible Liquidity
The Forex market’s incredible $4 trillion liquidity coupled with trading concentrated in a few major currencies makes it easier for traders to get in and out of trades at any time with large lot sizes at the click of a mouse. You can even set your online trading platform to close your position at a set profit level or close a trade if the market starts turning against you.

Considerable Leverage
The forex market’s boundless liquidity creates considerable trading leverage at ratios sometimes in the neighborhood of 200:1 This means a small  $50 deposit  can enable you to buy or sell $10000 worth of currencies. In the same vein a $500 deposit could turn into $100,000 trade and so on. However this considerable leverage available to traders can also be a poisoned chalice. Without proper risk management, this huge leverage could make or break your trades.

That’s a wrap for “Why Is Forex Trading Such a Global Phenomenon??” Hopefully this post has whet your apetite to pursue a career as a forex trader. If you have any questions or something to say, drop them both in the comment box…Till next time, take care.

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