Why Trade Forex?
24 Hour a Day Trading.
Unlike other markets the Forex market trades 24 hours per day meaning you do not have to wait for the market to open each day, you can trade whatever currency you like whenever you like 24 hours per day Monday to Friday. The trading platforms open at around 7am AEST on Monday morning and stay open until the following Saturday at 7am.
The Forex market trades 5 trillion dollars per day.
In any given 24 hour period the currency market trades over 5 trillion dollars per day making it the most liquid market in the world. With so many buyers and sellers in a 24-hour period this means that at any moment with a click of a button you can enter the currency market at the price you want to enter. You can enter at the market price or place a pending order to trigger you into the market at a given price. You don’t even need to be around your computer, the trading platform can take care of the entry order for you.
No commissions, no additional fees such as exchange fees or clearing fees.
The way in which brokers make their money in the currency market is by setting a bid or ask spread. When you enter your trade you will select a volume per tick that you want to trade and the broker will offer you a spread to overcome before you can begin to make money. For example if you trade with a volume of $0.50c per tick the spread being offered may be 2, meaning you will be filled 2 ticks away from the market price and once price has gone two ticks beyond your filled entry you will begin to make money. In this example the broker would make $1. Traders enjoy the currency market because the spread they pay is incremental to the amount of money per tick they trade.
In the currency market you can open a trading account with as little as $100 and begin trading with as little as 0.01 volume, which is approximately 10c if trading an Aussie Dollar position with an Aussie Dollar account. This means the barrier to entry is extremely low and you can begin to learn how to deal with the emotional elements of trading real money with small volume sizes.
Low levels of market manipulation.
Due to the sheer size of the currency market it is not possible for one trader to corner the currency market and consistently manipulate price to their advantage.
With 5 trillion dollars in liquidity exiting a position at a desired level and managing risk is critical. The currency market has so many buyers and sellers it gives traders a higher degree of certainty that they will be filled at the exit price they desire. Whilst gaps can occur they are far less common in the currency market due to the liquidity.
Making money both ways.
The currency market gives you the opportunity to profit when currencies rise and fall, making it a 100% recession proof investment opportunity. You must obviously get the direction correct however you do not pay anymore money when speculating that a currency may fall and you do not pay for stop loss orders. It is highly recommended that a stop loss be placed immediately an order is accepted into the currency market. This can also be done automatically by the trading platform.