Some benefits of Forex Trading

1. For beginners, it’s a good start: - In Forex market, accessibility is one of the benefits where trader can enter without huge investments. Without affecting the amount of capital you put down, successful trading requires skills and learning. Some software’s allow you to trade in demo mode without any risk, where you can hit and trial without buying, this demo software gives you the exact experience of live trading and familiarise yourself with the market movements and develop a risk management strategy without taking any risk.


2. 24 hour Trading is on: - Another good point in Forex is the rolling hours. Transactions are made between the trading parties which are called as OTC (over the counter). While on weekends, markets are closed for retails traders but the rates are continuously moving and this must be considered in the trading plans to limit your risk.


3. Leverage benefit is available: - In this market, traders are allowed to open their position with higher amount with low capital investment. Regular brokers provide you the leverage in terms of the ratio, limiting maximum leverage for retail traders. The common ratios are 1:30 and 1:50, so the retail traders can do trading of $50 with an investment of $1.


4. High liquidity is available: - In the financial terms, liquidity is something where you can buy or sell any asset with an ease without affecting the value of the asset. So the liquidity depends upon the activeness of the market. As this is a global market, which is dealing in certainly high volume and 24 hour activity in process
   
   So if you are dealing in major currency pairs of Forex like DOLLAR, GBP, EURO, so these assets can be easily exchanged without any high fluctuations.


5. Low transaction cost: - Not only entry is cheaper but the regular costing is also low in this market. In general, brokers make money from spreads measured into point in percentage and factored into the price of currency.
   
   Note: Pip stands for ‘point in percentage’ and is the unit of measurement used to show a change in one currency’s value against another.


6. Volatility: - External factors influence the Forex market in different ways;
   
   
   
   • Natural disaster
   
   
   • Deals
   
   
   • Global economy
   
   
   • Political news
   
   
   • Government policies
   
   
   
   Volatility is strongly linked to liquidity, and the more liquid major currency pairs tend to be less volatile.