Foreign Exchange Market or Forex is an international currency market, where one country’s currency is exchanged for that of another one. Forex is one of the largest and the most liquid financial markets in the world. Foreign Exchange market is very unique in its essence, because in comparison with other markets, where often monopoly exists, in Forex market there is no dominance and the market stays out of control. The number of the participants of the market keeps on increasing each day, as Forex trading is considered to be one of the easiest and the most popular ways of earning money.
The Benefits of Forex Trading
Forex trading has a number of advantages, which make it that much attractive and popular. Let us consider each advantage separately.
- 24 Hours Trading
- The market is available 24 hours a day, which means that you can easily choose the most convnient time for trading. And what is more important you can conduct your trading operations from any part of the world, neglecting the factor of time zone, as long as you have an Internet connection.
- High Liquidity
- Foreign Exchange has high liquidity, which means that traders do not have to search or struggle that much for finding someone who wants to buy or sell currency pairs, as there will always be someone in the market who would like to take the other side of your trade.
- No Middlemen: Direct Participation
- Forex trading is operated in a decentralized market, which means that it excludes the factor of middlemen and allows traders to trade directly with the market maker responsible for the pricing on a particular currency pair.
- Easy Market Access
- In comparison with the stocks, options or futures market, the amount of the money needed for entering Foreign Exchange market is quite low, which allows a lot of people to take part in trading.
- Demo Accounts and Free Forex Educational Materials
- Nowadays the Internet is overloaded with a great number of educational materials regarding Forex. Everyone can instantly find the information need on any question. What concerns demo accounts, there are many Forex brokers who offer trading on demo accounts, which helps beginners to get experience and practice trading skills. Read more about What is forex broker.
- Low Transaction Costs
- There are many Forex brokers who offer little or even no transaction fees, but the quotations of each currency pair are specified in two prices Bid / Ask for buying and selling, respectively. The price difference between Bid and Ask is called spread. Generally, spreads can be as little as 1.5 to 5 pips, depending on the broker and on the currency being traded.
What are the Tools Used For Analyzing Forex Market Trade?
Being that much attractive, Foreign Exchange Market is also very unpredictable, and you should be very careful while trading, and use some methods of analysis and tools that will help you somehow to forecast the behavior of the market. The two most well-known methods of analysis for predicting the market are technical analysis and fundamental analysis, which are considered to be the inseparable part of trading.
Technical analysis is used to predict the future trends of the prices by analyzing the past history. Many traders consider technical analysis to be the best method for predicting future prices. When speaking about technical analysis it is important to mention the tools that are most commonly used in technical analysis by traders: technical indicators, patterns, graphical models, etc.
Fundamental analysis is used to predict the future currency value by analyzing and predicting all the economic, political and social factors which can influence on currency value. Today, traders can easily get access to the news of the world with the help of newspaper, radio, TV and Internet. Many Forex brokers offer their own analytics on their websites, which also makes the process of trading easier.
Forex is attractive and profitable market, in case of taking trading seriously. In case of hard working you will manage to be a successful trader and get high profits.
IFC Markets is a leading innovative financial company, offering private and corporate investors wide set of trading and analytical tools. The company provides its clients with Forex and CFD trading through its own-generated trading platform NetTradeX, which is available on PC, iOS, Android and Windows Mobile. The company also offers MetaTrader 4 and MetaTrader 5 trading platforms available on PC, Mac OS, iOS and Android. You may compare the advantages of each platform.