We always see those advertisement about Forex. The question is: why Forex trading is becoming more and more popular? Firs reason is of course the size and volume of the market being traded on daily basis. Below is the list of reasons that make many people seriously consider joining the currency trading Market.
High Return on Investment
What attracts people at first place is potential of making a lot of money with little investment. That became possible because brokers now offer trading with leverage. It is the leverage that allows people like you and me with small funds to trade currencies in such a big market.
You can get leverage up to 100 or 200 from your broker. That means you can invest only 1/100 of the whole amount you want to trade. Therefore it gives the potential to make high returns on investments. However the opposite side of higher leverage is the risk of loosing your money becomes also very high.
Forex is the Largest Market
I mentioned before that Forex is one of the largest markets in the World. Currencies of equivalent to $4 trillion are being exchanged on average day. Unlike stocks or futures exchange Forex does not have the central exchange. However the big members of exchange like banks or other financial institutions are located in New York, London and Tokyo.
Very High Liquidity
You are probably aware that trade orders get filled very quickly in most cases. This is still because of high volume that leads to large liquidity. You don't need to wait long for the opposite order in the market.
Forex Involves Traders Around the World
What makes Forex unique is that traders trade currencies all around the world. That's one of the differences between foreign exchange and some other exchange markets. Currencies of many countries involved in trading. However some of them preferred more by traders than others. For instance Euro, Dollar, Yen and Pound have higher trading volumes than New Zealand Dollar for example.
Forex Can be Traded Any Time of The Day or Night
Many countries around the world are involved in trading Forex. That's the reason that makes Forex to be open 24 hours a day and 5 days a week except weekends. This fact makes it convenient for traders to chose their own time to work on their trading and chose the appropriate volatility of the pairs. Some currency pairs have higher volatility than others at specific period of time during the day.
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