FOREX MARKET THE UNDISPUTABLE KING OF MARKETS
Chances are you have already stumbled upon a few write-ups or ads about Forex trading, and wondering why it is gaining popularity so fast. There’s a reason why Forex market is called the “King of All Markets.” Read on to find out why.
Trading has become very popular, especially since pandemic struck the world. With today’s technology and the Covid-19 restrictions, it all comes down to what opportunities exist. Take advantage to capitalize on the market prices using your trading and analytical skills to make a decent income. You can trade in shares, stocks, commodities, currencies, gold, silver, and so on. Of all these, one stands out – The Forex Market.
What is Forex Market?
Simply put, forex market is the market where one country’s currency is traded for another. Traders make money on movements and exchange rates, then position themselves to either buy or sell currencies.
Why Forex Market is called the King of all markets?
Why lion is called king of the jungle? Who coronated lion as the king of the jungle? Same case as the Forex market. A true king needs no crown. Just as lion attains its position by power and heroism, forex market is called the king of all markets because of its power and potential.
Multi-Trillion Dollar Industry
Yes! You read it right! Forex market is a multi-trillion dollar industry where 6.6 trillion dollar worth of currencies are bought and sold on a daily basis. As if that is not enough, it is growing at an enviable rate of around 20%. Thus by sheer size and volume, forex indisputably becomes the king of all markets.
Unlike other markets, Forex operates round the clock. So, no matter what time zone you are in, there is always going to be a market open for you to trade. You can also trade different currencies in different time zones. This makes it convenient for you to trade in a way that fits in with your lifestyle. Even if you have a full day job that you do not want to let go, you can still have a very lucrative side income by trading after work, as it is open throughout the night. As for the shift workers out there, forex market is a boon as it is open 24x7 except on Saturdays and Sundays.
Leverage refers to the use of borrowed funds to do trading over and above one’s cash balance. This means that even if you have only 100 dollars as cash balance, you still can buy currencies worth above 100 dollars. In forex trading, the leverage available is up to 1:400. This means that you can trade up to 400 times your cash balance. This helps you to trade in the market even with just a few hundred dollars and still trade in large volumes. For instance, to secure a contract worth a hundred thousand dollars, you only need to have 250 dollars in hand as cash balance. This facility is not available in other markets like stock market.
Ease of Focus
There are literally thousands of stocks in the stock market that are available for trading. It is very challenging to follow them and keep track of their performance. Without following them regularly, it is difficult to get a grasp of them which is quintessential in putting up a good performance. However, when it comes to forex market, there are only 8 major currency pairs in general. So, you need to spend only lesser time in analysing a currency pair. Hence, it is a lot easier for a trader to keep his focus and perform better.
Ease of Trade
It is a lot easier to trade in forex market because of its high liquidity. Liquidity is the ability of a currency pair to be bought or sold per demand. The major forex pairs in general have very high liquidity. This makes Forex market the preferred destination for large banks and financial institutions. Furthermore, the rate of slippage is also low in Forex trading. Slippage refers to the difference between the price that you see on the screen and the price at which the actual trade takes place.
Bottomline is, smart traders always prefer to trade in the Forex market. At SmartFX, we provide smart training to beginners and experts alike to become successful in their trading career.