Why Trade Currencies In Foreign Exchange?
In this article, we are going to discuss about why trade currencies in foreign exchange. Well, there are so many reasons and advantages of trading currencies in foreign exchange online. Listed below are just a few points which highlights why trade currencies in foreign exchange online. Let us take a look:
No Commissions RequiredOne of the main reason to trade currencies in foreign exchange is that there are no commissions required. Moreover, there are no fees of any kind involved. Since, the commission is not paid to the brokers and therefore they are compensated for the services they provide through something called the bid-ask spread. The other reason to why trade currencies in foreign exchange online is that there are no middlemen. In spot currency trading, there are no middlemen required as you can trade directly with the market.
Low Costs of TransactionThe important reason supporting why trade currencies in foreign exchange is that the transactions costs (the bid/ask spread) involved on foreign exchange trading is very low. It is generally less than 0.1 percent in the foreign exchange currency transaction.
No fixed Lot SizeIn spot foreign exchange trading, the trader decides his own lot size. It gives the traders a freedom to take part in currency trading with even with lesser amount of money. Thus helping those traders who are new in to foreign currency trading and don’t want to put so much money on risk. It is one of the many advantages of trading currencies in foreign exchange.
24x7 MarketThe online foreign exchange markets is a 24x7 market. Therefore, you don’t have to wait for the opening bell. The forex markets are open in one part of the world or another at a time and it is appropriate to say that it never sleeps. This feature is especially beneficial for those who want to trade at odd hours since they are not free during the day time. It is one of the most common advantages of trading currencies in foreign exchange.
Highly LiquidThe foreign exchange market is so huge; therefore it is a very liquid market. It suggests that under normal market conditions, you can instantaneously buy and sell if you want to. There is no situation where you get stuck in a trade. Traders use online trading tools to automatically close their position at desired profit level and/or close a trade if a trade is going against them.