Why Trade in Forex?

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currencyinvestor19
Posts: 65
Joined: Sun Jul 05, 2020

Why Trade in Forex?

Post by currencyinvestor19 »

The forex currency market offers the day trader the ability to speculate on movements in foreign exchange markets and particular economies or regions. Furthermore, with no central market, forex offers trading opportunities around the clock.
Liquidity – In the forex market there is an average volume of over $3.2 trillion dollars traded per day. So, there is an abundance of trades and moves you can make.
Diversity – Firstly, you have the pairs stemming from the eight major global currencies. On top of that, many regional currency pairings are also available for trade. More options, more opportunities to turn a profit.
Accessibility – The forex market is readily accessible, open twenty-four hours a day, five days a week. As a result, you decide when to trade and how to trade.
Leverage – A significant amount of forex currency pairings are traded on margin. This is because leverage can be used to help you both buy and sell large quantities of currency. The greater the quantity, the greater the potential profit – or loss.
Low commissions – Forex offer relatively low costs and fees compared to other markets. In fact, some firms don’t charge any commission at all, you pay just the bid/ask spreads. True ECN firms may also offer 0 spread!

Major Currencies Traded In Forex
In the international forex day trading world, the vast majority of people focus on the seven most liquid currency pairs on earth, which are firstly the four ‘majors’:
• EUR/USD (euro/dollar)
• USD/JPY (dollar/Japanese yen)
• GBP/USD (British pound/dollar)
• USD/CHF (dollar/Swiss franc)
In addition, there are three emerging pairs:
• AUD/USD (Australian dollar/dollar)
• USD/CAD (dollar/Canadian dollar)
• NZD/USD (New Zealand dollar/dollar)
These currency pairs, in addition to a variety of other combinations, account for over 95% of all speculative trading in the forex market, as well as retail forex.
However, you will probably have noticed the US dollar is prevalent in the major currency pairings. This is because it’s the world’s leading reserve currency, playing a part in approximately 88% of currency trades.
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