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The Benefits of Trading Forex

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When CFD traders decide to choose the best market to trade in, they are looking for a market that offers the best trading conditions while at the same time promising high returns on investment. This is why forex trading is common amongst traders. Here are the advantages of trading forex.

You can go long or short

While other markets allow traders to go short, short selling is an integral part of trading forex. This is primarily because you are always selling currency to be able to buy another. How much a forex pair is worth is equal to the value of one unit of the base currency in the quote currency.

For instance, in a GBP/EUR pair, the pound is the base currency while the euro is the quote currency. If the pair stands at 1.12156, it means that a pound is worth 1.12156 euros. If you predict that the pound will increase against the euro, you can go long by buying the pair. If you think the pound will decrease, you can go short by selling the pair. 

Your profit or loss is determined by how accurate your predictions are.

It is a 24 hours market

The online forex market is one that operates around the clock, not only in Singapore but in other parts of the world too. This means that you can decide to trade forex as a part-time job or a full-time job. You can trade in the mornings, afternoons, or nights without restrictions.

The global forex market trading time is dictated by the opening hours in Wellington and closing hours in New York. This gives every trader around the globe the chance to trade for 24 hours for five days a week.

The best thing is that this market is so vast an entity that it cannot be controlled. 

High liquidity

Because of how big the forex market in Singapore and around the world is, it is also highly liquid. This is a benefit to you as a trader because you can buy or sell forex at a single click of a button. There is always someone in the market in search of your currency pairs. You will never be stuck in a trade. The best forex platforms even allow you to set automatic position closes once you achieve your desired profit.

Leverage

Forex trading makes it possible for traders to invest a small portion of their capital for a chance to win high returns. This is made possible by trading leverage. Some forex brokers can offer a trader 50 to 1 leverage. If a trader invests 50 dollars, they get the chance to make $2500 from trading currencies from the 50 to 1 leverage.

As promising as leverage is, it is vital to understand that the trader risks losing as much as they stand to win. Proper prediction is necessary to make the right trading decision.

Reasonable entry barriers

Most people shy away from inserting in forex because they imagine the cost of getting started is too high. The availability of numerous online forex trading platforms makes it relatively easy to start trading forex. Online forex brokers offer micro and mini trading account. Some require as low as Singapore currency equivalent of $25 to get started. This makes forex trading accessible to anyone willing to raise the start-up capital.

Internet trading

Trading forex in Singapure can be done via the internet. This means that a trader can trade forex while in the housed or on the move. All a trader needs is registering with an online forex trading platform. With an internet connection, it is possible to trade forex from a computer, or a handheld device.

You can withdraw your profits from the site straight to your bank account with ease.

The volatility of the forex market

The high number of currencies traded every minute makes the price of currencies extremely volatile. This presents an opportunity to make huge winnings if you can take advantage of the volatility.

There are numerous benefits you stand to enjoy when you choose forex trading as your ideal market. Always consider your attitude to risk over your financial goals before you venture into CFD trading.

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