Advantages of Forex Trading.

Advantages of Forex Trading.

It’s not just the stock market. The forex market also boasts many advantages over the futures market, similar to its overstocks.

But wait, there’s more… So much more!


Basic Overview of Forex Trading

The foreign exchange is also known as the forex or FX market.

Forex trading is a platform for individuals, corporations, and countries for trading currencies.

The FX market is a global financial market that allows one to trade among currencies. In short, currencies are traded in the forex market.

Forex trading refers to buying or selling one currency in a swap for another. 

Forex is the most heavily traded market worldwide because its participants are general people, corporations, and countries.

At the beginning of the trading, traders don’t need a considerable amount to invest. They can trade from anywhere in the world. 

Top 10 Advantages of Forex Trading

1. Forex is a Gigantic Global Market

Forex trading is sheer in size, and scale sits at the top of the list. 

A massive amount of money is traded in forex every day, around $6.6 trillion per day.

2. Good for Newbies

Compared with other trading platforms, forex is relatively easy and understandable as it provides a free demo account facility for newbies to practice trade and is risk-free. 

3. 24 Hours a Day Trading Option

The forex market is open 24 hours a day in distinct regions of the world, from 5 pm EST on Sunday to 4 pm EST on Friday.

4. Transaction Costs Are Comparatively Low

In forex, a trader can initially start trading with a small capital where the transaction costs are comparably low. Spreads are usually low, which makes forex comparatively cheaper. 

5. Benefits From Leverage

Apart from all reasons to trade in forex, the availability of leverage is possibly the most attractive feature. Leverage permits to spread a high position with relatively small capital.

6. High Liquidity Market 

The forex market, combined with the high volume and 24-hour movement, makes it the most liquid market in the trading world.

7. Volatility 

Economic steadiness & political policies make forex highly volatile at times. Volatility is strongly linked to liquidity, and the more liquid major currency pairs tend to be less volatile.

8. Buy or Sell Currency Pairs 

While trading Forex, the primary goal for all the traders is to buy low & sell high, and profit from your initial investment. Traders can buy or sell currency pairs relying on the circumstances of the market.

9. Technology Advanced

Like other trading markets such as stocks and shares, forex trading is relatively new. For example, mobile applications, trading algorithms, global connectivity, etc., make technology one of the significant benefits of forex trading. 

10. Satisfactorily Regulated

Since forex takes place in an international and digital landscape, its regulation is no easy task. Thankfully, though, this functions in a traders' favor and is considered one of the advantages of forex trading. 

Forex vs Stocks Market

A trader needs to know that forex trading is different from the stock market, although they both are associated with the financial market.

The forex market is about trading international currencies, and the stock market deals with shares of various companies.

Here are some of the significant points of difference between the forex market and stock market:

Forex vs Futures

  • Liquidity 

The Forex Market trades daily around $6.6 trillion, and it's the largest liquid market. 

At the same time, The futures market trades only $30 billion daily. So Future Market can't compete with the forex market. 

  • 24-Hour Market

Usually, the Future Market starts trading on Sunday at 6 PM and closes on Friday at 5 PM. However, trading stops for half an hour or an hour each day at the end of the day.

However, Forex Market has 24 hour trading time, and it is open for 5 days. The trading never stopped during these 5 days for a second.

So it's entirely up to the traders to choose the forex or futures market in terms of trading hours. 

  • Minimal or no commissions

In Future Market, there are many fees like Exchange/Clearing fees, National Futures Association (NFA) fee, Data fees, and Brokerage commissions to trade in this market. 

But In the Forex Market, there are no extra charges besides the transaction fees. Even the amount of transaction fee is very acceptable. 


  • Price Certainty


The forex market has rapid execution with price certainty.

The future market does not prove certainty in price and doesn't have instant execution.

The Future Market is a kind of unstable market. But the Forex Market is a profitable and stable market for traders.

  • Guaranteed Limited Risk

Traders must have position limitations for risk management. This number is set comparable to the money in a trader’s account.

Risk is minimized in the spot forex market because the online faculty of the trading platform will automatically develop a margin call if the required margin amount exceeds the available trading funds in your account.

To conclude, forex trading is all about winning and losing. But if you stick with your strategy and plan, I guess you are on the winner list. All you have to do is keep your patient alive.


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