Why I am attracted to Forex Trading?
- Firstly, you can start small, meaning you can open a mini trading account for as little as USD250! With this live account, you can start to trade live but provided you have Forex Trading knowledge. If not, it will be advisable not to go into this Forex Trading business.
- Secondly, in Forex market, there is no physical exchange as it operates entirely through the electronic network of banks, computer terminals or phone across different major financial centers. Because Forex market is a 24 hours market, the market does not close throughout the business week (Monday to Friday) cause after each market close, another market opens (see below diagram). Therefore, there will never be sudden night price gaps to worry about.
- Thirdly, the Forex market is highly liquid, roughly about USD3.5 trillion changing hands daily, meaning at any point of time, you can get in and out of the Forex market very easily.
- Fourthly, due to its liquidity, the Forex market allows you plenty of opportunities to earn at least USD 50 per day (minimum).
- Fifthly, the one and only cost for Forex Trading is only the spread payable to the Forex broker, which goes as low as 2-3 pips, which is about USD 20-30 to enter and close the trade. As compared to stock, the enter and close the trade transaction may cost as much USD50 or more depending on the number of lots that you have purchased and sold.
- Since the Forex market opens 24 hours a day, meaning that when you are back from your work, you can still participate at the Forex market at the comfort of your house. For those who are staying at Asia, we should consider ourselves very lucky since the golden hour of Forex Trading is somewhere between 8pm-12am (+8 GMT) when the London, Europe and US Forex market all close and open at this range of time, where the liquidity is at its highest.
- Last but not least, the Forex market also allows you to long or short the market, meaning you can buy the currency pair expecting the pair to go up in value or you can sell the currency pair expecting the pair to go down in value. Unlike stock, it is illegal to sell at the stock market without having any stock at hand.
With all the benefits that the Forex Market can give, it is therefore a very good financial instrument to engage to. With that in mind, the next question is how to select an online Forex broker and which platform to use, which I will be touching next.