Online trading of currency pairs is now very popular among youngsters. Many people now choose forex as their primary profession after the college. The advantages and popularity of forex trading also lured many stock, bond and commodity traders to change to forex. There are many factors that contribute to this popularity of forex trading.
1. Online Trading Facility: Unlike most other financial instruments, most of the retail currency trades are done online through broker-provided trading systems. Online transactions enable traders to perform transactions from anywhere; most importantly from the convenience of their own home. Interestingly, studies also show that youngsters are more interested in making money online than through conventional methods. This should also contribute to forex popularity.
2. Availability of advanced trading systems: The popularity of forex has in fact contributed to the research and advancement in online currency trading software platforms. Today's systems are highly sophisticated with advanced market research and order-entry tools. Moreover, the high availability of web-based systems facilitated the traders to trade from anywhere there is a computer and internet connectivity.
3. Forex better suits new traders: People newly ing trading of financial instruments as their profession tend to prefer forex for many reasons including its popularity, availability of online and offline forex resources, high availability of demo trading systems, comparatively simple price movements, easier to understand charts because of continuous trading, availability of micro, mini and standard accounts, etc.
4. Low upfront investment: Currency trading brokers offer many types of trading accounts namely micro, mini and standard accounts. Micro and mini accounts require very low capital investments compared to stock, commodity and bond trading accounts. Moreover, the standard forex leverage of 1:100 enable a trader to trade $100 worth currencies for just an investment of $1. Leverage also enable traders to make high profits from small investment. But this high leverage is also a demerit as it can also result in huge losses. A successful should know how to effectively use the leverage.
5. The predictability of the market: Although like most other financial markets forex market also experience high intraday price swings, there is an increased chance of predictability in the market because of central bank interventions. In global forex market most of the volume is in interbank market where banks carryout high volume transactions. The central banks of the countries control most of these trades. So the exchange rate monitoring policies of the central banks involve keeping the exchange rate to an optimum range. So whenever there is high price swings central banks try to control the exchange rate changes.
6. No centralized exchangesmarket regulators: Online forex trades are carried out round the clock on weekdays. There are no centralized exchangesmarket regulatorsgeography limits. This enable trades to trade any time without any day trading, short tradingother kind of trading restrictions.
This article is written for Orient Financial Brokers, a leading online forex trading broker in UAE offering tight spreads and a range of account features. In additional to forex OFB traders can trade a range of financial instruments including precious metals, treasuries, commodities and futures. OFB online gold trading service in Dubai helps traders to profit from gold rate changes.
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