Top 5 Reasons That Makes Forex Trading Popular

Forex is the largest market in terms of trading volume and the most liquidated market in the world. Because of this, the popularity of Forex trading is immensely huge. The popularity of trading Forex can somehow be credited to its access to the online world. Since it is now fast and easy, Forex has opened its doors to individual retail traders as previously, only huge institutional traders only have this advantage.

Here are some of the reasons that helped fuel the popularity of Forex Trading;

  • Leverage
  • High Liquidity
  • Easy Access
  • Boundless Trading Opportunities
  • Easy To Learn

Leverage

Just with a small capital, traders in the Forex market can already operate. But how? This is all thanks to the leverage available for Forex traders. The leverage in Forex can go up to 1000:1. This high leverage amount mirrors the return of investment. The power of this leverage is further enhanced since Forex brokers are mostly trading in micro and mini lots. As for those highly-regulated Forex trades, the leverage offered can go up 30:1.

High Liquidity

One of the key factors in making a profitable trade is through the market’s liquidity. The more liquidity the market can offer, the easier it is for every transaction and the more competitive the pricing can become. Because of this, the requirement for services offering Forex liquidity becomes necessary.

Easy Access

One thing that attracted traders is the fact that trading Forex can be easily accessed by small traders. One might think that to enter this market, you need a huge capital but actually, it doesn’t. One great feature of the Forex market is its very low cost during entry. Joining the Forex market doesn’t require huge capital unlike the one being used when you start up commodity futures or stocks trading.

Boundless Trading Opportunities

Another great thing about Forex trading is the boundless opportunities that it offers to its traders. Aside from that, the currency market is also open 24 hours every day for five days. The market is also actively traded throughout the day. The opportunity to earn a good amount of cash is what attracted retail traders. The huge number of trades happening every day is what makes the market very liquid and the bid-ask spread is really low.

Easy To Learn

Trading in the Forex market is also very easy. There are already a lot of means to learn and understand the market just like online webinars, trading books, or even from experienced traders who humbly share their experiences in trading. Just like in commodities, stocks, and options, the best thing you can do as a new trader is to learn about the market, the ins and outs that can affect your entire trading experience.

Takeaway

A lot of factors contribute to why people get interested in Forex trading. There are also a lot of currency pairs that a Forex trader must get familiar with. It is important to remember that finding the best currency pair is not that complicated but plays a major role in the success of Forex trade.

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