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Five reasons forex trading is becoming increasingly popular

by John Saunders
11th May 22 3:56 pm

Forex trading involves the exchange of various currencies via spot trading, futures and forward contracts. The number of traders and investors who speculate in the forex market has increased for a couple of reasons. From the enormous profit potential to the ease of access, the currency market has indeed grown beyond our expectations. If you’re wondering why this growth happened, then keep reading to find out.

1. Convenient trading hours

The forex market never sleeps. There are three main trading sessions; the London session, the New York session and the Asian session. These three sessions overlap such that a new session begins before the previous one ends. This creates a loop and ensures that there is enough liquidity and volatility for forex trades to take advantage of by executing trades on platforms like oanda.com.

Having 24-hour access to the trading facility and environment helps traders choose the best time to trade, depending on their schedule. Trading the forex market provides a lot of flexibility for market participants, and traders around the world trade different sessions depending on their time zones and availability.

Those who use trading robots and expert advisors can maximise their profits by scanning this market for trading opportunities all day long. This means that they can profit from all-day trading without executing trades since their processes have been automated actively.

The ability to trade at any time of the day makes this financial market a great alternative for traders who have busy schedules and is one of the reasons it is becoming popular, and why the forex market keeps booming.

2. Availability of trading resources

A lot of learning tools and materials teach basic to advanced forex trading concepts. Most of these are available online in the form of courses, ebooks, paid or free video lessons, etc.

Thanks to technological advancements, learning to trade has never been easier! Traders love the forex market because these learning resources can be found and obtained with ease. The plethora of forex brokers and trading robots available make this form of trading relatively stress-free.

3. High volatility

Volatility refers to the extent of price movements and fluctuations that occur in a specific asset. The forex market is highly volatile because it is highly responsive to the news and economic data being released daily. The currency market also reacts to political and international news and updates that can affect the value of a currency.

The market volatility is influenced by the trading session and the nature of the currency pair. The advantage of volatility is that it presents traders with lots of trading opportunities and allows traders to make a lot of profits in a short period of time.

4. Ease of access

To access the currency market, all you need is a trading platform installed on a device with an internet connection. The ease of access to the forex market makes it very attractive to retail traders and investors around the world. Coupled with the availability of learning resources, traders can learn to trade online and profit from the forex market anywhere.

In addition to the ease of access, there is also a low barrier to entry. It’s easy to register on a trading platform and trade while compounding your profits over time. This has attracted many traders as social media buzz and advertisements promote forex trading as a way of earning passive income and amassing a great deal of wealth.

5. High liquidity

The large trading volume of the currency market is a unique feature that significantly benefits traders and attracts new traders and investors on a daily basis.

Liquidity refers to the ease with which trades can be executed and managed. The high liquidity of the forex market is sustained by the enormous trading volume and the many participants that trade daily. This ensures that at every point in time, there would be counterparties to your trades. It also helps to quicken trade execution, reduce trading fees and facilitate seamless trading and predictable price movements.

Less liquid assets are associated with random price fluctuations that make them difficult to trade.

 

The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision. London Loves Business bears no responsibility for any gains or losses.

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