Making Sense of the Forex Market

Making Sense of the Forex MarketThe Forex market can be bewildering for the most intelligent of people if they haven’t been exposed to it. But with thousands of people trading daily on it, surely there is something to be gained when you know how to work it. Trading the Forex market is becoming increasingly popular as traders abandon tradition stock trading due to unfavourable conditions. As with any investment, there are always a number of advantages and disadvantages to trading this particular market depending on your personal circumstance. However, when Forex traders invest for the right reasons, utilise their trading skills and knowledge of market behaviour, profitable trading decisions are never far away. But why has Forex trading become so popular?

Anyone can Trade

One reason the Forex market has exploded in popularity over recent years is that entering the market has become easier than ever. Traders no longer need large deposits in their trading accounts in order to trade. By trading through a Forex broker like Alpari.com, Forex traders can select an account size that is suited to their capital. This allows them to trade only what they can afford to lose and trade micro amounts in comparison to traditional financial markets.

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Trade in Any Direction

Many investors prefer to trade the Forex market for the simple reason that they have the possibility to trade and make profit regardless of the direction the market takes. Forex traders are able to trade both falling and rising markets. This gives them the opportunity to find profitable opportunities whether the market goes up or down. Looking for favourable trends, traders can enter and exit the market once they witness the change they expect by trading with their market predictions.

Liquidity & Profitability

The need for daily currency exchange has made the Forex market the largest and most liquid financial market in the world. Being in a constant state of flux, the market has an inherent liquidity that makes it ideal for Forex traders looking for the right opportunity in which to make profitable trades. The greater liquidity allows for frequent profitable opportunities for traders and has undoubtedly led to the increase of people trading currency markets recently.

24 Hour Trading

The real advantage for many traders is that the Forex market offers 24 hours trading. Traders can trade around the clock wherever they are in the world. Trading 5 ½ days a week, Forex traders can find active pairs to trade as and when they need them.

Unregulated in Nature

Unlike the stock and commodity markets that are strictly regulated, the Forex market remains largely unregulated in nature. Whilst this opens the market up to fraudulent activities due to the lack of a central marketplace, it also provides profitable trading opportunities for Forex traders. Additionally, traders who go through reputable Forex brokers can put their minds at rest if they are regulated by independent bodies like the Financial Services Authority. Whilst discrepancies can always occur, traders can take any issues to this body should they find they need to.

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Free Forex Education & Demo Accounts

Experienced Forex traders will always tell you that knowledge of the markets is the key to trading success. One of the great things about Forex trading is that information on it is widely and freely available online. Not only can beginners to Forex learn about the markets and currency pairs through educational resources, they can practice using demo accounts and develop their trading skills before they risk any investment. This important as most cost effective Forex trading strategies are the ones that have been developed from trader experience alone.

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  1. Hi Bhose, this is a great introduction to the Forex market. As you pointed out, it’s open 24 hours a day, 5 days a week. This means you can trade in your own time, after work or over your lunch break. And when you’re busy with somethng else, you can setup ‘robots’ (called ‘Expert Advisors’) on the MT4 platform to trade on your behalf.

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