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Forex is the short for Foreign Exchange Market. It is a cash market where currencies of different countries are traded through brokers. Forex trading is done 24 hours a day since it involves international trading. It is like any other financial trading instrument and has a great potential for making profits determined by the rise and fall in currency prices. The rate at which the currency is traded is known as "Forex rate" or "rate".
High Liquidity
Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In forex this means we can move large amounts of money into and out of foreign currency with minimal price movement. It is considered to be the most liquid market. In the world. By maintaining high liquidity it ensures price stability.
24 hour market
Forex market is a round the clock 24 hour market. While the market activity can slow down at certain tines during the day, traders can take control of their work hours by working in any of the three major sessions which suit their preference or trading style. The market never closes and this means that trading can take place at any time during the day or the night
Low transaction cost
In forex trading, the cost for a transaction is built into the price. It is called the spread. The spread is the difference between the buying and selling price. Thus, there is a low or minimum transaction cost involved.
Low investment
Forex trading requires low investment. Less capital investment means less risk when we consider this initial investment with the initial investment that the stock market requires in order to start, we will find that it is comparatively quite low. Many people who invest in this worldwide market find that they are extremely lucky when it comes to earnings and that they can actually turn it into a profitable business.
Leverage
Forex Brokers allow traders to trade the market using leverage. Leverage is the ability to trade more money on the market than what is in the trader's account. In Forex trading, a small margin deposit can control a much larger contract value. Leverage gives the trader the ability to make high profits and at the same time keep risk to the minimum.
High Profit Potential from Rising and Falling Prices
The forex market has no restrictions for trading. If you think a currency pair is going to increase in value; you can buy it, or go long. Similarly, if you think it could decrease in value you can sell it, or go short.
There are no hidden fees: There are no hidden costs or fees involved. It is a transparent system of currency trading.
Free 'DEMO' Accounts, News, Charts and analysis
Most Online Forex firms offer free 'Demo' accounts to practice trading, along with breaking Forex news and charting services. These are valuable resources for most traders.