Trading has evolved considerably over the past fifteen years and today anyone can trade, although trading is not for everyone.
If you are considering becoming a trader, the first question you should ask yourself is, “Which market should I choose?”. You can think of futures, options, commodities, stocks or currencies.
While all markets have their own appeal, the benefits of online trading are quite underestimated. We’re here to introduce you to the key benefits of forex and provide you with the knowledge you need to start trading currencies online.
Forex trading has become widely available over the past few decades and these days more and more people are beginning to wonder what the main benefits of trading are. Some of these people are familiar with online trading via stocks, but it is essential to understand the advantages offered by Forex compared to the stock market.
This article will focus on the main advantages of the Forex market for beginners in its first section. Once the market risks are explained, the benefits for professionals will also be explored.
The main advantages of Forex trading for beginners
You can start trading Forex with a relatively small amount and this is really one of the main advantages of Forex. Even though you need to deposit around $10,000 to start trading stocks, you can easily start trading currencies with a deposit of $100. For small traders, this is one of the most important advantages of Forex trading.
Liquidity
Forex is the most liquid market in the world. Why is that? Because there is a constant supply and demand for money. One of the advantages of forex trading is that the market is open 24/5. This means you don’t have to adjust your schedule for market opening hours, as you can trade all day. Under normal market conditions, you can trade easily, as there is near-constant supply and demand in the Forex market.
Technological development
Software advancement is definitely one of the most important advantages of trading. While most futures, stocks or options brokers provide you with platforms developed years ago, Forex brokers provide the latest trading platforms. Moreover, there are also a large amount of third-party software providers that provide effective trading extensions.
Admirals provides you with the market leading Forex trading platforms – MetaTrader 4 and MetaTrader 5 . These platforms are desktop programs for your PC and are also available for Android and iOS. As a special advantage, Admirals allows you to install MetaTrader 4 for your Mac OS .
Trade Forex and CFDs
While the Forex advantages mentioned above are very important, selling currencies without acquiring them first is one of the main advantages of Forex trading. The main philosophy of trading is to buy low and sell high, but with Forex you can also sell high and buy low. This way, you can generate profits on both the downside and the upside.
Although it is possible to sell stocks and futures, it is much more complicated to do. On the other hand, in the case of currencies, you can simply sell the assets if you think the trend is down with a single click.
Leverage
When it comes to trading, the rule of thumb is: the bigger your capital, the bigger your order size.
Leverage is an important weapon in the arsenal of Forex advantages. When using this leverage, a trader can buy or sell up to 500 times more funds than he actually had. In this way, one can easily generate more substantial gains (or losses), even without having a large capital at your disposal.
Above are the top five advantages of Forex trading. Of course, there are more, but the above is the most important, especially for beginners.
Next to the advantages of the Forex market, there are the advantages of the Forex broker. With Admirals, you benefit from competitive trading conditions and invaluable educational resources to learn how to trade. This is where a few additional Forex advantages come into play.
Unrestricted demo account
Unlike many other financial service providers, Forex brokers allow you to preview their services and test your trading knowledge on a demo account . This way, you can trade paper money while knowing real market conditions. Best of all, there are no restrictions on this account, you can trade as much as you want.
With Admirals, you can participate in learning sessions with well-known professionals. Read our educational articles to learn about the pros and cons of Forex trading .
Risks involved
It is difficult to come across a set of advantages without disadvantages and Forex is no exception. As Forex is the largest financial market in the world, a high degree of volatility can be expected. While high volatility is great for traders, high volatility combined with high leverage can lead to huge losses. In some cases, this may result in a loss that exceeds your deposit. This is why you should carefully consider Forex trading or seek expert advice before committing.
As we have looked at the main benefits of the Forex market for beginners , let’s see what this market has to offer for professionals.
Benefits of Forex Trading for Professionals
If you are a professional trader, you are probably aware of the main advantages listed above and you also understand the risks of trading in the forex market. Yet, there are other strengths of Forex trading that you may not be aware of. Below we will highlight the most important points for people with years of experience in this field.
