Last year, the Forex market worldwide had an overall value of $2.4 quadrillion. Showing utmost liquidity and opportunity for gains. This is in a nutshell, more than a big country’s output with their economy combined. As we can carefully analyze, the large corporations, pension funds and investment banks have taken over this market in Forex Trading however, there is still enough space in the playing field for individual traders.
The Global Landscape of Forex
As you commence with Trading Forex, there are different currency pairs available and can be traded as CFDs or Contracts for Difference.With over 170 types of minor, exotic and currency pairs, you are able to speculate them through CFDs based on the asset’s price rising or falling. Over the counter Markets or OTCs, which are non-centralized markets containing a huge number of people involved. Compared to traditional markets such as the Nasdaq and S&P 500 operating in usual centralized exchanges.
By Nature, trading in the Forex market is decentralized given that there are regions where they have certain exchanges that are concentrated in certain participant’s markets like investors, commercial businesses and most importantly banks.
What are the Benefits of the Forex Market?
As much as we all know that the Forex Trading market is risky, but there are advantages that you can experience in it.
One of the things you can enjoy is the 24-hour market as there is not trading that is limited in certain time zones or hours and it gives the traders utmost flexibility depending on their free time to trade.
Leverages are some of the best things you can get from trading forex. These are the offers given by brokers for retail trading individuals where they give them an increased amount of exposure.
There is high liquidity in trading as you are practically transacting in the biggest global market around and is the most liquid as it can go as far as $6.6 trillion every day in terms of trading volume.
Currency trading is very relative and altho a specific currency can depreciate, it can appreciate compared to a different currency that has dipped lower.
And finally, one of the things you can totally enjoy as an advantage in forex trading is there are no regulatory fees and exchange fees that are present in other forms of trading. The trading costs overall are very low whether this has commission or no commission prices given
5 Currency Pairs that are at the top of the food chain
You might also be wondering, now that you have knowledge of Forex Trading, what are the most traded currency pairs?
1 Euro vs United States Dollar
2 Japanese Yen vs United States Dollar
3 Great British Pound vs United States Dollar
4 Australian Dollar vs United States Dollar
5 Canadian Dollar vs United States Dollar
These currency’s prices are influenced by different aspects like political stability, international trade, and inflation.
The High risk in Forex Trading
Bottom line, Retail Forex trading is highly risky. However, bear in mind that despite the highly leveraged options for Forex Trading, there are possible big gains in the process as well. As most know, leverages can multiply gains thanks to an increase in exposure, the gains are multiplied for the trader.
Of course with all forms of investment, there are bound to be risks involved but with the right amount of knowledge and control, you will be able to control the risks you take and will eventually lead into financial gains that you aimed for ever since you have decided to get into forex.
