Forex Analysis - Stage 2

STAGE II – WHY

Before taking up any job, course or even a habit, what is important is to understand why exactly do you want to take it up? There always has to a reason for things to be done by you. When it comes to Forex market, investors have recently started rushing in, as more and more traders have now started earning their living through trading foreign exchange. All these investors trade Forex for many reasons, the main one being the superior returns which they are likely to get back. Apart from this, there are also many other factors which create an exclusive investment atmosphere for the traders in Forex, such as:

Accessibility
Liquidity
Commission free
Leverage

Accessibility

Being a 24 hour market, there is always some investor, someplace in the world whom you can trade with as so many such traders are dynamically trading foreign currencies somewhere in the world or another. This also enables these traders to respond to any latest news of the market, without delay.

Providing a 24 hour trading opportunity, you can trade anytime from Sunday 5:00 pm (ET) to Friday 4:30 pm. This gives traders a chance to trade according to their convenience, like going to bed or spending time with their family, or going by their own schedule.

Liquidity

Forex as a market contains high levels of liquidity, leading to an even higher degree of transparency in the big sized transactions and lots of money changing hands. Being the largest financial market in the world, Forex changes more than $2 trillion hands every day.
Being such a large and liquid market helps Forex attract enormous players, some retail and some large scale.

Commission free

With “free of commission” trading, many dealers believe is a perceived benefit of Forex. Forex trading lets its investors keep 100% of their trading profits. Although this does not change the high degree of business deal costs being paid to the dealers via the bid-ask spread, this free of cost trading makes Forex an even more lucrative business opportunity for the traders as well as the dealers.

Leverage

Forex market offers higher leverage and with its lower margin requirements it enables the Forex traders to trade with much bigger sum of currency as compared to their initial deposit. Leverage mostly also depends on the type of Forex broker an investor has chosen for trading.

Think about it this way, where would you find a trading market so partial to an investor, at least apparently. But to make the most of these factors, it is equally important for you to be aware of their shortcomings as well.

Surely all these factors like liquidity, leverage, convenience, and transaction costs can be used as money making tools, but so can they be used for losing all your funds. Yes, of course anything if misused or over used can result in harmful ways. Everything benefits to a limit, with a skill and method to use it with balance.
And this is what makes a difference between a beginner trader who might use these tools in all the wrong ways to destroy his wealth, and the refined investor who will have the experience and expertise to use them all to create wealth.