There are both advantages and disadvantages to forex trading. On the plus side, currency trading doesn’t require much money to start, and markets are open 24 hours a day, five days a week. The huge size of the market means liquidity is never an issue. Furthermore, forex returns can be earned quickly without paying high commissions or fees. On the downside, the forex market is volatile. Moreover, small traders are disadvantaged against larger institutions when it comes to information and technology. Finally, forex trading doesn’t bring the interest and dividend payments that come from investing in bonds and stocks.
- Individuals seeking to enter the forex market should weigh the advantages and disadvantages of forex in order to decide whether it’s an attractive and appropriate market for them.
- The forex market is among the most accessible markets for individual traders. Traders can set up a forex account within a period of one to three days and begin trading with £50.
- Depending on where they are operating from, traders may be able to obtain access to margin that allows leverage of 100:1, or more, for initial capital invested in a trade.
“While there are some risks to forex trading, there are also many advantages that can make it a lucrative and attractive activity.”