A More Robust Market Environment
One benefits of forex trading forex is the fact that it is the most liquid financial market in the world. The high trading volumes ensure that there is always someone to take the other side of a trade; this allows traders to open and close trades with ease. In addition, the Forex market is so large that no one person or institution can easily manipulate it in a sustained manner.
Low Initial Investment
Start-up costs are low, when compared to trading the stock or futures markets. While some brokers still have minimum deposit requirements that are in the tens-of-thousands, there are quite a few reputable brokers who will accept initial deposits as low as $1; one such broker is Oanda.
Simpler Choice of Instruments
More than eighty percent of all trading transactions are made in the seven major currencies. The major currencies are: US Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), and Swiss Franc (CHF). This liquidity allows day traders to focus on a few trading instruments (currency pairs). Therefore, a trader can get to know each pair better, and therefore become a specialist.
However, traders are not limited to trading the major currency pairs. Most currencies have crosses that make it possible to participate in all of the major economies around the world. A Forex cross is one that is not regarded as one of the major currency pairs.
High Profit Potential
Another advantage of trading Forex is that you can make money when prices are falling, just as easily as when prices are rising. There is no penalty or rule against short trading, you can buy or sell a currency against any other currency, once your Forex broker offers that currency pair. Some refer to this characteristic as the perpetual bull market.