The forex market is a well-known platform among traders for its accessibility, liquidity and nature of transactions. Using online portals like the MT5 trading platform, traders from all over Australia can sell and buy currency and profit from over-the-counter transactions. Additionally, it does not involve the physical exchange of goods. There are over 10 million forex traders actively trading currencies in the world. The daily turnover of famous forex traders in Australia comes to 119.5 USD as of April 2019. There is a growth in the number of novices trading forex. These are some reasons why.
It is a Purely Global Market
Unlike stocks, shares and mutual funds that can have a local constriction, the forex market is expansive and global, as traders from any place can participate on the same platform. They exchange over 4 trillion dollars every day, on average. The sheer size of the forex market provides opportunities for novice traders to enter at different levels, learn, trade and make gains.
Provides Demo Accounts to Practice on
First-time traders entering the market can learn about the trade and market shifts and test their strategies using demo accounts. Trading applications like the MT5 trading platform where individuals can test the performance of currency pairs without pledging real currency. They can test out their trading strategies, learn from other traders and test out the waters before committing to deal in the real market. It increases their chances of success and prevents loss.
Works For 24 Hours For Five Days Of The Week
As the foreign exchange market is global, trading takes place every hour as the market is active in some parts of the world. The marker operates 24 hours a day and five working days a week. The market initially opens on Sunday at 5 PM in Sydney, Australia and closes on Friday at 5 PM in New York. It allows new traders to explore the market when they want and when they have time, as many novices might have other commitments to attend to during Australian working hours.
Highly Liquid Currency Trading
The foreign exchange market is one of the most liquid global markets as currency trading happens every hour for five days of the week. It helps novice retail investors to engage in transactions without much effect on their value. High liquidity also guarantees lower risk as the trader controls buying and selling the assets.
Low Charges for Transactions
The MT5 trading platform allows traders to begin trading with a minimum amount without worrying about spending on transactional values. Transaction cost in forex trading involves the broker fees. Online software and applications reduce the brokerage cost, therefore reducing the overall investment of traders.
It is Not Controlled by One Person or Organization
The forex market is a free market space with participants from all around the world and not a single one controlling it solely. External factors like the global economy, geopolitics, geographical events, policies and natural calamities influence the prices. As it has no middlemen involved, the market shows prominence for exchange as the only investment. It only has brokers who help buyers and sellers connect and perform transactions.
No Restriction Towards Directional Trading
Unlike the stock market, forex trade does not have any restriction for the trader to trade directionally. They are allowed to buy and sell currencies based on market movements. Therefore, they can conveniently go long or sell short, depending on their value predictions and strategies. The advent of technology has led traders to embrace new technology to follow market trends and make appropriate decisions.
