Why Trade Forex
FOREX is a favoured vehicle among active and technical traders. The combination of a seamless 5 day per week 24 hour market, inbuilt leverage and huge daily volume creates an environment ripe for speculators.
Spot FOREX is a leveraged product traded on margin. The amount of initial margin required represents a very small percentage (as low as 1%) of the value of currency position being controlled. This is very attractive to active and experienced traders because it has the effect of amplifying potential returns. The downside is that leverage also amplifies potential losses and it is very important to understand the market being traded, impact of trading with leverage and to employ effective risk and trade management techniques. Refer to our PDS for more information on the risks of trading with leverage.
24 hour trading
In terms of hours traded the global Forex market opens on Monday morning in New Zealand and closes on Friday evening in New York. Although there are periods of increased activity throughout each day and night that coincide with normal business hours in the relevant traded currencies the Forex week is one continuous and seamless trading session. From a trading perspective the 24 hour day is seen to reduce the risk of gap movements that tend to occur in markets that observe overnight closure periods.
Liquidity refers to the amount of volume traded in a market and Forex is one of the world’s largest markets in terms daily traded volume. To the seasoned trader, market volume represents a higher probability of getting filled at a desired price and a reduction in the potential for manipulation of price action.
Lower Trading Costs
Trading costs in Forex are comparatively cheap when viewed alongside other traditional asset classes such as equities or bonds. This is due to the fact that there are no associated execution or clearing fees in FOREX which would normally be paid when trading exchange based markets. Forex providers do charge commissions which are either charged on top of or added to the market spread but these fees are comparatively low.
Advanced Trading Software
Forex trading software is among some of the most advanced and cheapest in the market when compared to other asset classes. Real time data for Forex is free and our platforms offer charting, market news, account keeping and trading access with the ability to place Entry, If Done and OCO orders. The MT4 platform also allows algorithmic traders to write trading strategies in computer code and have the platform automatically execute and manage trades.