Online Forex Trading

Forex trading is when people sell and buy foreign currencies, making a profit from the difference of a trade. Not all traders make a profit, and it will depend on how the market goes, which is always fluctuating at any given time. The forex market is where foreign currencies are traded, and many people believe currency trading is an integral component in overseas trade. When companies or governments buy goods or services from the international market, they have to pay with the currency of the country they are buying from, hence the need for forex markets.

Why Trade Currencies?

Before the internet, currency trading was not a common practice and was only left to the high net worth individuals, multinationals and hedge fund managers because it required a tremendous amount of capital. With the internet, the retail forex trading market has enabled individual traders to invest through banks and brokers who offer higher leverage, allowing the traders to control larger trades while maintaining a small trading account balance.

Why Trade Forex?

In most cases, when a trader chooses which market to trade, they are looking for the one where they will make maximum profit. There are several reasons why people trade forex, and here we shall highlight some of them.

  • Trading hours

Forex trading operates on a 24-hour basis five days a week, making it one of the most convenient investing platforms. Trades open 9:00 pm Sunday and close 10:00 pm Friday (GMT). This is because trades are completed over the counter, meaning the transactions are between the parties involved and do not have to go through the central exchanger.

  • Brokers leverage

Brokers offer high leverage to traders, enabling them to trade large volumes with a limited account balance. Traders who take advantage of this leverage can make good money if a trade goes their way.