Why Trade Forex ?

There is a great number of reasons why traders should consider adding Forex trading to their portfolio; including liquidity, market hours, leverage and low transaction costs.  These qualities are beneficial whether you begin trading with $1,000 or $1 Million.

Liquidity

By now you’ve heard that volume tops several trillion dollars each day in the foreign exchange market.  This incredible trading volume offers liquidity that allows traders to instantly execute trades online.

Market Hours

This is of particular interest to those who have full-time jobs outside their trading.  Forex is a 24-hour market that opens Sunday afternoon and closes Friday afternoon.  Trade at any hour from anywhere with an internet connection.

Leverage

Let it be clear that leverage is a double-edge sword; exacerbating gains and losses.  However, leverage can be a useful tool for traders who wish to begin trading with a small dollar amount.  Leverage allows you to control bigger positions than you would otherwise be able to while many brokers protect against your account falling below zero (debit balance).

Low Transaction Costs

While many Forex Brokers charge no commissions, a trader faces only a spread between the bid and ask prices as a transaction cost.  In contrast to stocks, options, etc this allows a trader with a smaller account balance to keep transaction costs to a small fraction of the trade size.  Transaction costs are uniform as a percentage of the trade size.