“By now, I am sure you’ve heard of the term Forex. Forex stands for foreign exchange trading or currency trading.” This was the opening statement to Jones Mutual’s top financial analyst, Tony Hampton, at a recent conference for young entrepreneurs. The outcome of this conference was to encourage young entrepreneurial minds to become financially independent by investing in the Forex market. During his speech, Hampton mentioned some of the top benefits of trading on the Forex market and how you can make your profit work for you.
The Forex market is open for 24 hours
For as long as there is an active currency market open anywhere across the globe, you are able to trade with it. Buying and selling foreign currency to make a profit can be done in any time zone and at any time of the day or night. As soon as the market opens in Australia on a Sunday until after the market closes in New York on a Friday, you are able to trade with any currency of your choice.
You can expect high liquidity levels on the Forex market
When a market has a high liquidity level, you have more chances of making profit. This means that huge amounts of money can be moved from one currency to another without the price of it moving a huge deal. With that said, you need not have to wait to get a return on your trade. As soon as the price moves in your favour, which can be anything from a few minutes to a few hours, depending on your pre-set profit preferences, you can make a profit.
When trading on the Forex market, the transaction costs are very low
If you open a trade, you need not worry about transaction costs. In essence, the transaction cost is built into the buy or selling price of a Forex trade. Called the spread, it is the difference between the buy and sell price of a bid. That way, you can rest assured that you never invest more than you should.
Forex trading enables you to make use of leverage
When you want to open a trade but do not have enough money in your trading account, you can make use of leverage. This means that you can, for example, trade with a leverage of 20:1, meaning you get to trade with $20 000 on the market while only using $1 000 of your own capital. You need to remember that should your trade be unprofitable; you still need to pay the leverage amount you used back to the brokerage account you are using. However, if the trade is profitable, you walk away with a much larger amount of money than you would have when only making use of the money available in your account.
You have the benefit of making profit from both rising and falling prices
When thinking of the Forex market in general, one would think a currency needs to rise before one can make a profit from an open trade. However, you can also make profit from falling prices. If a currency is at a high price at a certain point in time and you believe the currency is going to fall, you can open a selling bid. Thus, should the market price fall, you make a profit from it. That way, no matter what direction the market is heading in, the opportunity for making a profitable trade is always there.
Forex market trading can be done from anywhere
Trading on the Forex market does not require you to go to an office in order to make money. It also does not require you to clock in and out like you would at a nine to five job. It does, however, require you to have self-discipline. You need to know at what times it would benefit you the most to open or close trades. What makes it so easy is the fact that you can trade from anywhere. As long as you have an active internet connection or data on your mobile, you are good to go. You can even opt for automated trading, which enables you to set trading preferences that will automatically take place, regardless of where you are or what you are doing.