Why is Forex the best market to trade? The reasons are many and we are going to explore all of them, but before we jump into it, let us first explore a brief history of the Forex market.
HISTORY OF THE FOREX MARKET
Forex, also known as foreign exchange is the most liquid market in the world, likewise the largest. Its retail part has come with the evolution of the Internet which allowed retail clients to trade forex online via different trading platforms. Forex started to function to retail clients in the late 1990s. At this time, the first retail online brokers started their operations. Forex, as a market had been in existence for decades prior to that, it was just that it only accepted institutional clients. Currently there are trillions of US dollars which are traded daily in the Forex market, with retail clients contributing nearly 5% of the total volume or around 250 billion US dollars. Now that we have an understanding of what the Forex market is, let's take a look at the reasons to trade in the foreign exchange market.
REASONS WHY FOREX IS THE BEST MARKET TO TRADE
Different traders have various reasons for selecting the Forex market. The truth is, Forex has a lot to offer for any type of trader and there are vast reasons to trade in the forex world. The primary reasons why forex is the top market to trade are explained below.
The mechanics behind trading are rather simple. The trader acquires an asset for a favorable price and you are expected to get rid of this asset. The more volatile the market is, the more opportunities springs up to acquire and get rid of the assets you have. As you may understand, if the market is dynamic, holding your capital in it makes little sense. Volatility in the Forex market is great, and you can regularly expect to see a price move for around 50-100 pips on one of the major pairs on almost any day of the week.
While volatility is of essence and truly tells us why forex is the best market to trade, we should never neglect accessibility. Even though forex is capricious, and it is possible to catch lots of market moves, this market is more reachable than any other online trading market. Trading Forex online can be started with as little as 100 USD. Unlike many other markets, this is a rather low trading capital requirement. Forex market is also easily accessible as you can sign up your trading account from your Personal computer.
Forex trading is highly monitored, and many Forex brokers are regulated by more than one authority. This shows that Forex is a safe market to trade, although it applies only to regulated brokers.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.