8 Reasons You Should Trade Forex

Overview

1. Introduction

2. Characteristics of the Forex Market

1) Deep Liquidity

2) A 24-hour Market

3) No Centralized Exchange

4) Market Transparency

5) Dollar-Most Widely Traded

6) High Equality

3. 8 Reasons Why You Should Trade Forex

1) Low Entry Barrier

2) Low Trading Cost

3) Amazing Leverage

4) High Profit Potential

5) Accessibility

6) Advanced Trading Platform

7) Risk Management Tools Available

8) Friendly to Beginners

4. 2022 Best Forex Brokers in the World

5. Conclusion

A Brief Introduction

This article describes six distinctive features of the forex market in comparison to comparison financial markets, eight reasons why you should trade forex, as well as a list of top 10 forex brokers for your reference in choosing a proper forex broker.

Characteristics of the Forex Market

Compared to other markets, there are several distinctive characteristics of the forex market, including:

1. Deep Liquidity

Approximately $1.5 trillion is traded in spot FX each day, making it the largest and most liquid market in the world. You can easily see that foreign exchange liquidity is vastly superior to that of futures markets which account for $437.4 billion and equities which account for $191 billion. Although there are many currencies throughout the world, 80% of daily transactions involve the major currencies.

2. A 24-hour Market

As the forex market is open 24 hours a day, five days a week, exchange rates and market conditions can fluctuate at any time based on developments which are possible at any time. A sharp move in exchange rates may also occur during an off-hour, elsewhere in the world, which means that traders and other market participants must be aware of this possibility.

3. No Centralized Exchange

There is no centralised exchange that controls the global forex market. In fact, it is almost always based on a follow-the-sun cycle, which is divided into three regions: Australasia, Europe, and North America. Continuous trading operations between these financial centers provide traders around the world with the opportunity to capture trades in a decentralized market based on different time zones.

4. Market Transparency

FX markets are known for high levels of price transparency, and the development of online foreign exchange trading continues to contribute to this improvement, to the benefit of traders. Direct access to the market maker is one of the key advantages of trading foreign exchange online. A reputable forex broker will provide traders with live, real-time prices. Besides, the difference between indicative and executable prices should be clearly distinguished.

5. Dollar-Most Widely Traded

Among the major currencies that make up the foreign exchange market, the dollar is the most dominant. Whenever you trade on the forex market, you will find that this currency is paired with the currency of every country. Daily, a large proportion of transactions involve the dollar as one of the two currencies involved.

6. High Equality

Since the Forex market is such a huge market, it is impossible for any single person or institution to make a significant impact on it. For all intents and purposes, the retail trader in the Forex market is on the same level as the biggest bank in terms of what he can achieve with regards to forex trading. Forex is not a market that can be manipulated in any way.

8 Reasons Why You Should Trade Forex

Given six features of the forex market discussed above, here share eight reasons why you should trade forex:

1. Low Entry Barrier

As compared to other markets, the forex market has a much lower entry barrier. It is not necessary to have a large amount of money to begin trading forex. With forex being the most accessible financial market in the world, you can begin your trading journey for as little as $100, or even less. When you decide to start, you should always be aware forex trading is approached with the aim of achieving your goals and with an understanding of the level of risk involved.

2. Low Trading Cost

Trading costs on the forex market are much lower in comparison to other markets. Unlike other investments, there are no commissions associated with these markets. In the forex market, only the difference between buying and selling prices of currencies constitutes the costs of trading in most cases. Since costs are low, the possibility of incurring losses is also minimal, making trading profitable for small investors.

3. Amazing Leverage

In forex trading, the usage of leverage can make a small deposit have a significant effect on the total contract value. Leverage allows traders to make nice profits while keeping their risk capital to a minimum. For example, a forex broker offers 1:100 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $5,000 worth of currencies. Similarly, with $500 dollars, one could trade with $50,000 dollars and so on.

4. High Profit Potential

Currency traders can profit from falling or rising currency prices by employing one of the most popular strategies of currency trading, directional trading. To put it simply, you can either go long (buy) or short (sell) for a pair of currencies when you anticipate an increase or decrease in value.

Currency traders can profit from falling or rising currency prices by employing one of the most popular strategies of currency trading, directional trading. To put it simply, you can either go long (buy) or short (sell) for a pair of currencies when you anticipate an increase or decrease in value.

5. Accessibility

The modern technology allows you to access the market anywhere and at any time. You will just need a mobile device and an internet connection to do so. Trading platforms are available on both desktop and mobile devices, and mobile networks provide a fast connection almost anywhere. Trading can be done from a train while commuting, from a bar while on vacation, and even while traveling.

6. Advanced Trading Platforms (Automating trading)

As you begin trading forex, you will have access to a number of advanced trading platforms available from brokerages, including MetaTrader 4, MetaTrader 5, Trading View, cTrader, and more. In addition to being user-friendly, these platforms provide traders with access to operating trading bots, such as Expert Advisors (EA), which allows them to duplicate successful traders' trades, which increases their profitability. As a final point, most trading platforms offered by brokerage firms are free to use.

7. Risk Management Tools Available

In any financial market, whether it is forex, commodities, stocks, or any other, there will always be risk involved. To succeed in the forex market on a long-term basis, traders must employ proper forex risk management techniques. Among the crucial risk management elements available to you when trading forex are: demo trading account, setting stop and limit orders, setting price alerts, and the risk-reward ratio.

8. Friendly to Beginners

Considering the lower costs, the vast array of free educational resources, and the ability to practice using a demo account, forex can be a great market to start out in for beginning traders. Prior to commencing trading, new traders should exercise caution and ensure they have done their research and have a thorough understanding of the forex market.

2022 Best Forex Brokers in the World

Since the forex market is a magic and lucrative place where both forex brokerage and traders dream of making large fortune, thats why lots of forex scams pop up consistently.

Therefore, the very first step to ensure you is to avoid select a reliable broker based on some important factors including regulation, trading costs (spreads & commission), trading platform available, deposit and withdrawal, paving the way for a safe and sound forex journey.

The following list of 2022 Best Forex Brokers in the World selected by WikiFX, is available for your reference in choosing a proper forex brokerage:

Broker	Regulation	Minimum Deposit	Spreads	Trading Platform	Customer Support
	FCA,FSA, NFA,IIROC,CIMA, MAS, ASIC,	$100	0.2 pips	MT4, MetaTrader EAs, VPS	6 x24
	ASIC, SCBCYSECFCA,DFSA	$200	0.0 pips	MT4, MT5CTrader,Social Tradding	5x 24
	ASIC,FSC, FSA,DFSA CYSEC,	$10	0.6 pips	MT4, MT5Proprietary Platform, WebTrader	7X 24
	FCA, CYSECFSCA,FSA	$10	0.1 pips	MT4, MT5	7 x24
	ASIC,CYSEC	100AUD or equivalent	0.0 pips	MT4, MT5WebTrader	7x 24
	ASIC,FCA	$/€/£10, ₦10,000	0.0 pips	MT4, MT5Mobile Trading	5x 24
	ASIC,FCA,FSA,FMA,MAS	GBP250	0.1 pips	MT4,Proprietary Platform	5x 24
	ASIC,FCA,FSA/SFC	$2000	0.1 pips	Proprietary Platform	5 x24
	FCA,SCB	$250	0.5 pips	MT4, MT5Proprietary Platform, WebTrader	5 x24
	ASIC, FSA,CBI,FSCA,FCA	$100	0.9 pips	MT4,MT5DupliTradeZuluTrade	5 x24

Here is a video to give you a more intuitive expression:

Conclusion

To sum up, the forex market obviously features multiple advantages, such as low entry threshold, high profit potential, usage of leverage, a series of help tools, but it can be volatile, on the other side. Before you make a forex trading decision, please make sure you know the risk involved, always trade with a normal heart, and become more experienced and mature to pursue the long-term profit.