Forex is a short form of Foreign Exchange. This is a market to trade currencies. It is the most liquid market in the world which is open round the clock. This is one market which literally doesn’t sleep. The benefits of trading Forex market are many. Forex trading is one of the easiest to begin with. You can start trading real time with as low as USD 100. You can start by trading small and start learning about Forex trading. One can also start trading with the aid of a simulator. However, simulator trading might not benefit in the long run. Forex trading allows you to trade multiple instruments which are basically currency pairs. Generally a Forex trade will consist of a standard currency pair in which you are buying one currency and selling (giving) another currency.
Options of currency pairs are innumerable. Another advantage of Forex trading is that the market is highly liquid. This allows the trader to actively believe in the current price. Unlike many other illiquid markets, the Forex market has participants ranging from large Fund houses, banks, Governments, Retail/Individual investors. Benefits also include availability of multiple platforms to trade. With large number of platforms for the trader, to choose from, the charges become competitive. Hence the transaction costs in the Forex market are reasonable. The software/platform comes with a range of charting tools which are user friendly. Most of the platforms come with a demo which helps the trader to test and helps avoid costly mistakes.
Forex market is a widely followed one. It is believed that the macroeconomic effects are first felt by the Forex market before any other asset class. Hence trading the forex market enhances the Macroeconomic understanding of the individual. Also the currency market serves as a diversification option for many investors. The investors are able to hold their wealth in multiple currencies. This is beneficial when the home currency weakens. The trader can then exchange the forex for his home currency and realize handsome returns. Another benefit of forex trades is that the duration of the trades can be very low and offer a trader to benefit from his decisions very quickly. However, the risk of a loss is also immediate. Technical Analysis is also very helpful in trading currency market. This is because many traders use various technical indicators like Moving Average, Pivot Chart, Fibonacci etc. These indicators work as a self-fulfilling prophecy. A trader can see the success of many technical indicators on the Forex market.
Large research is being done on the forex market. It is possible to obtain research reports at reasonable costs if a person is an active trader. Also, most of the import-export data which is published helps form a long-term view of a currency. The forex market is affected by a variety of fundamental factors, with the trade flows being the most obvious one which affects it. The economic news has a very quick impact on Forex market. It is possible to trade the Forex market with subscription to a faster real-time news service. Forex trading allows almost anyone to trade from anywhere on the planet and hence can be a good market to trade as a part-time profession as well.