Why Should I Learn to Trade the Forex?

There are advantages to trading Forex and here are some reasons why so many people trade in the Forex Market:

There are no commissions. As far as fees go there are no clearing fees, exchange fees, government fees or brokerage fees. The Forex brokers are paid for their services through something called the bid-ask spread.

There are no middlemen in your trades. This means spot currency trading gets rid of the middlemen which allows you to trade directly with the market responsible for the pricing on a particular currency pair.

The lot sizes are not fixed. In the futures markets, the lot or contract size is determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. Therefore traders are allowed to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).

Low transaction costs. The transaction cost, or the bid/ask spread, is typically less than 0.1 percent under normal market conditionsand can be as low as .07 percent but this of course this depends on your leverage.

The forex is a 24-hour market so there is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is fatastic for those who trade on a part-time basis, because you can choose when you want to trade, in the morning, afternoon or night.

No one can corner the market on the Forex as it is so huge and has so many participants, that no single entity (not even a central bank) can control the market price for an extended period of time.

You can use leverage in Forex trading, which means a small margin deposit can control a much larger total contract value. It gives the trader the ability to make good profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $100 dollar margin deposit would enable a trader to buy or sell $20,000 worth of currencies. Similarly, with $1000 dollars, one could trade with $200,000 dollars and so on. But be warned that leverage is a double-edged sword and without proper risk management, this high degree of leverage can lead to large losses too.

The Forex has high liquidity because is so huge, so under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade and can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).

You can practice with a free “Demo” Accounts, News, Charts, and Analysis as most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.

Forex has “Mini” and “Micro” trading, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does mean that Forex is much more accessible to the average (less rich) individual who doesn't have lots of start-up trading capital.