The Forex market is one of the world’s most risky and dangerous platform for investors. Still, the market hold the top spot in the list of most popular investment business. The implication is relatively easy in such a case that options trading has some unique characteristics that have made it possible to earn that much popularity for it.
Benefits of Trading in the Forex industry
To be honest, the list is quite big. In comparison with other share markets, it offers much more and unique facilities to its practitioners. Let’s behold some of the major ones:
- Commission Free
Unlike many other marketplaces, Forex is entirely commission-free. Report for any hidden charges is a rare complaint unless someone has fallen victim to some kind of spam.
Traders won’t have to count any additional fee for exchanging, government procedures, or brokerage system. Compensation for most retail brokers’ given services comes from traders’ earned “spreads.”
- Lot Sizes are not fixed
Only by exchanges, contract sizes and lots can be specified in the futures’ markets. For instances, an ideal sized contract amounts to around 5000 ounces for silver futures. But if you intend to trade the options market as a fulltime trader, make sure you know about the trading conditions at Saxo Bank. Get a clear idea so that you don’t get puzzled in determining the perfect lot size.
Depending on their account sizes and respective strategies, investors can trade in Forex with smaller or bigger lots or position sizes. These facilitate every trader’s scope to participate in a trade with even a small amount of money, say 1000 units of a currency.
- Limited Transaction Cost
The retail transaction-cost is measured by different bid and ask prices, which is typically lower than 0.1% in the usual market condition. Spreads could plummet to 0.07% for bigger transaction sizes. The whole measurement system and the consequent result depend on the leverage size.
- Around the Globe and Over the-Clock
The trading is always on in the Forex marketplace. When one region of the world declares a day for it, another region kicks off their trading activities for the day. So, from the Australian market opening on Monday morning to New York’s closing on the afternoon of a Friday, the currency trading business is seamless.
Such a feature makes the platform more feasible for newcomers and part-time traders. They can pace their trading journey and choose when to place an order: morning, between morning and noon, afternoon, twilight, dusk, evening, or in the night. One can trade even when sleeping.
- Forex is Ever Flowing
The most phenomenal advantage of the Forex industry is its fluidity. The liquidity level is verily near to that of water. It means no one will ever undergo a little bit of struggle to buy or sell a pair any time during the day.
This level of liquidity is impossible to take over with just stretching one or two strings here and there. The scope and depth of the foreign currency market is so massive that not being a global event or part of breaking news, no one can nudge even the slightest degree of its typical state. No single entity can establish dominance over a price or an exchange rate.
In the Forex market, even a tiny investment can manipulate larger times bigger contract value. Leverage is the ultimate facilitator that empowers an investor to make massive profits while keeping the risk to capital to a minimum. For instance, say a trader has found himself working with a 50-to-1 ratio of leverage. With this much leverage, he can maneuver $2500 with a margin balance of $50.
But before indulging in this apparently dreamy advantage of leverage, traders should look a little deeper. Leverage will make them count the amount for a defeat as much as they do for a win. The difference is, for the former one, the money will be cut off from their pocket, and for the other, the money will end up in their pocket.