As we all know forex market is the largest financial market with trillions of dollars trading volume on a daily basis. Previously, commercial and financial transactions handled by banks and other large financial institutions were the major players in the Forex market. However, now the development of online trading is offering individuals the chance to invest their funds in forex. Most currency trading is based on speculation. Forex speculators contribute a lot to the liquidity of forex market.
Then why is forex speculation so popular like a pop star admired by speculators? To explain this, you have to know the advantages of forex speculation.
Advantages of forex speculation No.1: High liquidity
From the perspective of a speculator, liquidity is very important because it determines how easily price can change over a given time period. The high liquidity in forex market enables huge individual trading volumes to happen with very little effect on price, or price action. Besides, with the liquidity, you can instantaneously buy/ sell at will with a click of a mouse under normal market conditions, as there will usually be someone in the market who is willing to take the other side of your trade. You are not easy to “stuck” in a trade.
Advantages of forex speculation No.2: Low cost
Low cost can be reasoned from two aspects. First, there are no commissions in forex trading. Most retail brokers get the payoff for their services through spreads (the difference between bid and ask price). Moreover, the retail transaction cost (the bid/ask spread) will not be very high under normal market conditions. You can make a research about it when choosing a forex company or broker.
Advantages of forex speculation No.3: Free time, free place
One of the most appealing aspects of forex is that you can trade at any time anywhere. As long as you have a PC, an internet connection and available funds, you can start to trade Forex. Forex market never sleeps from the Monday morning opening in Australia to the afternoon close in New York. You can choose when you want to trade.
Advantages of forex speculation No.4: Suitable for various speculators
There are different types of accounts for different investors. If your pocket is a little thin you can start with a mini account with as little as $250 or you can open a regular account with larger funds.
Advantages of forex speculation No.5: No monopoly
Forex market is so massive and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time. This is very important for individuals. With no monopoly, it offers a relatively equal business environment.
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