As you probably know, the Forex currency exchange is the world’s largest financial market tipping the financial scale at more than 150 times the size of the New York Stock Exchange.
With the growth and expansion of the Internet, this mega-market has become accessible for individual retail traders all over the world.
But it was not always that way. In fact, for most of its existence since 1971; the Forex currency market was only available to international banks, hedge funds, other giant financial institutions and a few of the world’s richest individuals.
For those with the knowledge and the money to access that market, profit potential was exceptional and, presumably, that was one of the reasons, most trades required a minimum investment account in the million dollar range for any transactions in the currency futures or spot Forex markets – both of which exposed you to unlimited risk.
As an investor, you had to have a high risk threshold and you had to continuously monitor the market. If a trade happened to go against you, you could admittance was restricted for so long. Of course, there was the fact that you had to have a huge bankroll in order to play in the Forex currency exchange game. A few years ago, potentially you could lose your entire investment; plus you might get a margin call that could cost you even more. Back then, your downside risk was a very frightening thing.
But these days everyone, including you, can participate in this huge and potentially profitable market, taking advantage of new investment vehicles that give investors immediate, limited-risk access to the world’s huge currency markets. And that only begins to describe the tremendous advantages of investing in the currency markets. A complete list would be a long one, but here are a half dozen of the best reasons the Forex currency exchange is attracting so many investors.
It works great on a part time basis. Since the Forex market is open 24 hours, there are plenty of trading opportunities every day. No large investor can corner the market and control the forex trading. The forex market is too large and too liquid for that. When one currency depreciates there is always another that goes up. So, unlike any other market, Forex cannot crash. Both rising and falling currencies offer you a profit opportunity. Whether going long or short, if your predictions are correct you will make money. You do not have to have a lot of investment capital. If you use the available high leverage properly, you can make significant profits without having a large trading account. No commission charges are the rule rather than the exception for most Forex brokers. They get paid on the spread which keep your costs down.
The Forex currency exchange market is capitalism in its purest form. It is completely driven by supply and demand. That means that it is the competition among major banks of the world, which sets the prices…and that’s a very good thing!
In this article, we have presented some guidelines to assist you in working your way through the many adverts you see for Forex, FX or foreign currency exchange trading. If you will keep these points in mind, it is likely that you will be able to find a trading system or Forex strategy that meets your individual goals.