Forex trading has become popular, but it can be difficult. On the positive side, forex trades don’t have commissions or fees and the market has high liquidity. In addition, forex offers a number of currency pairs to trade and accommodates a variety of trading styles. It also has low capital requirements and easy entry. Forex lacks a central regulator, which can be a positive or a negative (i.e., lack of transparency). Furthermore, the volatility of forex and the use of leverage can boost profits, but also increase losses. Exchange rates at the heart of forex are determined by very complex technical indicators. A final downside is that learning the ins and outs of forex is up to the trader; there aren’t portfolio managers or trade advisors.
Key Takeaways:
- Forex trading can have very low costs (brokerage and commissions). There are no commissions in a real sense–most forex brokers make profits from the spreads between forex currencies.
- Compared with any other financial markets, the forex market has the largest number of market participants.
- Due to tight spreads in terms of pips, one can easily start forex trading with a small amount of initial capital.
“The forex markets run all day, enabling trades at one’s convenience, which is very advantageous to short-term traders who tend to take positions over short durations (say a few minutes to a few hours). Few traders makes trades during complete off-hours.”
Read more: https://www.investopedia.com/articles/forex/050115/pros-cons-forex-trading-career.asp
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