ou have to be living under a rock if you haven’t heard of forex trading. It is the process of selling a currency and buying another on the foreign exchange market to earn some profit or hedge currency risks. It is a very interesting way to earn money because it can give you great returns if done well but can also waste a lot of your capital if you don’t really know what you’re doing. 

That being said, there are lots of benefits to forex trading that newbies don’t really know about. So, what are they? Let’s find out.

The Benefits Of FX Trading

There are several reasons why so many people are flocking to the currency exchange trade to try their luck. 

Round The Clock Trading 

The great thing about FX trading is that it’s going twenty-four hours a day. The trading day begins with the Asian market, has the European and UK financial market hours in between and ends with the American currency exchange market, right before the Asian market begins again. This routine allows traders to enter and exit easily since there will always be buyers and sellers present. 

Great Liquidity Opportunities

Let’s expand on the previous point. If there are countless buyers and sellers present at any given time, there are also countless opportunities for trading and raking in your profits for the day. Liquidity is essentially the ability of an asset to be sold easily and with as little loss as possible. 

This twenty-four-hour availability also means that transactions are easy to do and won’t cost you much. 

Ease Of Access

Most people find the prospect of breaking into the financial world scary because of the high costs associated with this venture. However, FX trading doesn’t require you to start off with a lot of capital. Even $100 will do for most brokers!

Using Leverage

In simple terms, leverage is something that allows you to trade with more than what you have in your account. Leverage is described in ratios such as 1:30 or 1:50. If you’re using a 1:30 leverage, you can trade for 30 dollars for each $1 you have in your account. 

It allows you to open at a higher position than what your current capital would allow you to do. Any profit or loss you incur will be in line with the position you closed at, which will allow you to make great profits with a small investment. All you need to do is have a good eye!

Going Long Or Short

The Forex Market is a great place for you if you like to monitor world events and predict the effect they will have on some currencies. If you think an event might influence a currency pair so that its value increases, you can buy it. Doing so is called going long. 

On the other hand, if you think a currency pair is about to decrease in value, you can sell it. Doing so is called going short. Going long or short at a suitable time can result in massive profits for the trader.