Advantages to Forex trading
Low start-up costs

With most businesses there is a significant capital outlay to start up and get earning. The Forex world gives you access to a potentially very rewarding business for a really low setup cost.

Most brokers will give you free software to trade with so all you really need is a laptop or computer with an internet connection. Then all you need to do is fund your trading account and you are in business.

It’s cheap when compared to stocks and the like

The transaction fees in Forex are very low in comparison to the Stock Market. You usually only have to pay a fee per trade which is referred to as the “spread” and is generally a couple of pips worth.

Ease of access

It is a relatively simple process to get into trading Forex. There are plenty of brokers out there who you can register with, with a few simple clicks of a button. There is also a vast amount of free information available online at various sites like Google and YouTube.

Flexible lot or position sizing

In the stock market, you have pre-determined contract sizes that you can trade. With Forex, there is far more flexibility and this allows people with smaller accounts to take advantage of the financial markets as well. So don’t stress if you don’t have millions to start trading with!

Liquidity

This can be a real pain in the ass with the stock market. I have been caught in a trade before where I was not able to exit the position due to the fact that nobody wanted to buy what I was selling. This is never an issue in the Forex market. Due to the sheer size of it and the volumes traded every day, there is always someone willing to buy what you are selling in Forex.

Leveraged accounts

As much as this is an advantage in trading, you need to understand that there is a risk associated with this as well. Good risk management needs to be kept in place.

Leveraged accounts mean that you are able to purchase a much larger contract size with a smaller amount of money. For example, if you had a trading account with 1:100 leverage, this would mean that you can buy or sell Forex up to 100 times the value of your account. So with $1000 you could buy or sell a currency for up to $100,000. That’s pretty cool in my book!

Market accessibility

The Forex market does not close, apart from the weekend. So that means you have more flexibility in terms of hours that you can trade the market.
The Johannesburg Stock Market here in South Africa closes every afternoon and then reopens for business in the morning. So if you are a hard working citizen who only gets home after the market has closed, you aren’t in a position to trade. The Forex market gives you the opportunity to work hard and then go home with enough time on your hands to take some trades and make some money. Who said that burning the candle at both ends isn’t fun?