Benefits of Forex Trading
- The forex market is the largest and most liquid of the financial markets.
- Daily activity often exceeds $4 trillion USD a day, with over $1.5 trillion of that conducted in the form of spot trading.
- Forex spot trades consist of a contract to trade a given amount of a currency pair derivative with a market-maker, at the advertised buy / sell price (the spot rate).
- It is the existence of volatility within the forex market that enables trader’s to take advantage of exchange rate fluctuations for speculative purposes
Market Hours and Liquidity
- Forex trading operates 24 hours a day, five days a week. The greatest liquidity occurs when operational hours in multiple time zones overlap.
- One of the key elements behind forex’s popularity is the fact that forex markets are open 24-hours a day from Sunday evening through to Friday night. Trading follows the clock, opening on Monday morning in Wellington, New Zealand, progressing to Asian trade spearheaded out of Tokyo and Singapore, before moving to London and closing on Friday evening in New York.
- Forex market has no physical location or central exchange and trades 24-hours a day through a global network of businesses, banks and individuals. This means that currency prices are constantly fluctuating in value against each other, offering multiple trading opportunities.