Nov 17 2016
What Makes FOREX Trading So Popular?
If you are not investing on the FOREX market yet, you’d better get started– there are countless moneymaking opportunities everydaywith FOREX, the largest and most liquid market in the world. Today, around 5 trillionAmerican dollars are traded every day on the FOREX exchange. There are numerous playersin this market: large banks, central banks, multinationals, hedge funds and private investors.
So, why has trading currencies become so popular?
What is the FOREX Market?
FOREX stands for Foreign Exchange and is where market participants can buy and sell currencies. Depending on the country’s currency, you can find different types of currency pairs: majors, minors, and exotics.
Brokers, like UFX.COM, often apply different spreads depending on the liquidity and volatility of the particular currency pair you’re trading. It’s thus always better to know in advance the trading conditions with whichthe broker you’re using can provide you (spread, margin, leverage effect, etc.).
Why is this market so popular?
- Flexibility: The FOREX market is open from Monday to Friday, 24 hours a day. It’s thus very convenient, as you can trade whenever you want.
- High leverage: When investing on currencies, you are using a leveraged account, which allows you to open trades worth more money than you’ve actually invested.
- Size of the position: Many brokers offer different lotsfor trading currencies, depending on the size of the position you wish to open. 1 standard lot is 100,000 units. A mini-lot is 10,000 units, while a micro-lot represents 1,000.
- Liquidity and Volatility: This is one of the most volatile and liquid markets around. A well-informed and experienced trader can take advantage of a sizable profit, thanks to volatilityover short periods of time.
- Scalping and Day Trading:For private traders,trading currencies is often done with the short term in mind, as it’s easier for a day trader or a scalper to make money on short price movements and have all their positions closed at the end of the trading day.
- Advanced platforms and trading tools:The increasing accessibility of platforms and state-of-the-art tools help inform your trading decisions. You can really profit from everything that your brokers put at your disposal.