Why trade forex? Trading forex has several benefits, including the ability to trade on margin, high liquidity, and the flexibility to change around the clock from Sunday through to Friday.
Leverage is a crucial feature of FX trading and means you only need to put up a small initial deposit, or margin, to enter a trade. Our margins start from 0.20%, which is a leverage of 500:1.
Margined trading can be a more efficient use of your capital because you only have to provide a percentage of the overall value of your position while maintaining total exposure to the market. This effectively means you increase your profit potential if the market moves in your favor and your loss potential if the market moves against you.
For example, with £100 as the position margin, you could enter a position with an overall value of £40,000. However, remember that increased leverage enhances losses as well as profits. Additionally, markets can move against you, and losses can exceed your initial deposit due to rapid price movements.
Why trade forex?
Forex is an over-the-counter (OTC) market, meaning trades like shares or indices don’t occur through a centralized exchange. Instead, FX trading takes place across the globe, around the clock, from Sunday night through to Friday night. Why trade forex?
This means that, unlike any other financial markets, investors can almost always respond to currency fluctuations caused by economic, political, and social events as they occur without having to wait for markets to open.
Currency markets offer price volatility 24 hours a day, so whatever your trading strategy, there is the potential to find numerous trading opportunities. Unfortunately, this also means that the markets are constantly moving, which places even more emphasis on monitoring your positions and using the appropriate risk management tools.
The currency market is the world’s most heavily traded financial market, with a daily average turnover of around $5 trillion. Moreover, with so many global market participants selling anytime throughout the day, the currency markets are more liquid than any other financial market.