Why is Online FX Trading Becoming So Popular? [Forex]

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Investors in their thousands are turning their backs on the stock market and instead choosing online fx trading (also known as forex, foreign exchange or currency trading). Why is this so and how can you also potentially profit from online fx trading?

A 24 Hour A Day Market

The forex market is open 24 hours a day, five and a half days a week. This means it's perfect for fitting around peoples current lifestyle regardless of how busy that lifestyle may be. You get to choose to trade forex when it suits you and you are not dictated to by set market hours.

World's Largest Market

Approximately USD$4 trillion a day changes hands through the forex markets. This dwarfs every other financial market in the world including all of the world’s stock markets combined. This means that your account size will never outgrow the forex market and it also means it's very hard for anyone to manipulate.

Trading Forex with Leverage

Leverage is the ability to control a large amount of money with a relatively smaller capital base. For example when you purchase a house using a bank loan you are using leverage. You may only outlay a 20% deposit and the bank lends you the remaining 80% of your house's value. You are now in a position to control a large asset for only a 20% outlay. Online fx trading is very similar. You may only have to put up as little as a 0.25% deposit on the trades you take. Typically when you trade the stock market you are required to outlay the entire value of the shares you are purchasing.

Ease of Access and Low Costs

Due to the high level of competition between online forex brokers it means the cost of placing a forex trade is extremely low. Opening a forex account has also never been easier. An account can be opened online and usually takes less than 15 minutes. Your broker will also provide you free charts and live data which keeps overheads low. Finally, due to the benefits of leverage, it is now possible to start online fx trading with as little as a few hundred dollars.

Forex Trends Beautifully

When a currency's price starts to increase or decrease it will often continue in that direction for an extended period of time. This is called a trending market and trending markets are much easier to profit from than non-trending markets due to their increased levels of predictability. The forex market is renowned for being a great trending market since it moves based on economic cycles within a country and those economic cycles take place over many years, even decades.

How Can You Learn to Profit from Online FX Trading?

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