Forex is nothing but an abbreviation of foreign exchange. It simply means the trade happening between two participants who would buy and sell a pair of foreign currencies for specific bid and ask prices. For instance, if you think that the value of USD is going to rise shortly and that of the GBP is going to fall, you can buy USD and sell GBP for a decent price. If your prediction goes right, you will make profits from both currencies. Buying a currency means going long in it and selling will denote shorting. If major events are happening in certain countries, the currency values will fluctuate and you can make money out of it. You need not trade in forex only for profits. You can also do it for simply exchanging the currencies. For instance, you can take your money out in ZAR if you work with forex brokers with ZAR accounts. Likewise, there are numerous notable factors in the forex market. The following are some beneficial factors that drive most people to join the forex trading market.
Why people are enthusiastically joining the forex trading market?
Ease of access
The forex market is accessible for anyone who has a device with an internet connection. There are no restrictions for people from any region of the world to enter the market. As you would trade with a broker, you will get access to a highly featured trading platform that works well to make your trading session smooth. Hence, you will feel it easy to trade in the market. Also, you will get several tools and articles that would help you improve the possibility of making profits in the market.
If you have a certain amount of money in the stock market, you could buy stocks for that amount only. However, you can involve in a trading action that accounts for a value more than what you have in your account in the forex market with the help of the leverage option. The broker will help you do this and will take a small portion as the commission for this. It improves the profitability of your trading activity.
There is no central exchange that operates the forex market. Also, you need not interact or operate with a middleman other than your broker to complete your trades. The entire system is decentralized and it is a beneficial factor for the traders. Also, there could not be any bullish or bearish activity when it comes to the values of the currencies. So, you need not fear the unexpected fluctuations in the forex market as there would be in the stock market.
The attractive factor of a forex market is its accessibility for 24 hours per day in the working days. So, you need not wait for the market to open every morning. You can even trade late in the night as somewhere in the world it will be a day with an active market.