Forex trading is becoming more and more popular with active traders due to its advantages over other trading tools。Recent surveys have shown that traditional equity CFD trading is quite large, moving instead to products such as foreign exchange that are traded 24 hours a day。

Let's take a look at the top 5 reasons traders love Forex trading and whether you can benefit from this highly active market。

1.The foreign exchange market is open all day

The forex market is traded 24 hours a day from the opening of the New Zealand market on Monday morning to the closing of the US market on Friday evening。

You can trade forex at any time during this period, and since the market is never closed, when the market opens, it does not cross your stop loss, causing you to lose more than you expected。

One of the main reasons for traders to switch from equity CFDs to Forex is that the equity gap is too large and collapses overnight。By contrast, the forex market doesn't jump or jump multiple times a year on big news, though this is rare.。

2.Foreign exchange market turnover

The foreign exchange market is the largest in the world, with trillions of dollars traded every day.。According to Dow Jones Newswires, the daily turnover in the foreign exchange market is as high as 4.71 trillion dollars。

This means that you can buy and sell in large quantities at will if you wish, without worrying about not being able to close the deal。Therefore, execution is fast and easy, and when trading forex, especially when trading major forex trading, you will never find yourself waiting for order execution。

If you trade exotic currency pairs or unusual trading sizes, you may have to watch for small volumes at certain times of the day。

Another important aspect of daily turnover is knowing when the market is most active, with the London fixing and New York fixing being the most active so far.。Australian trading sessions are usually very light unless there is a major economic announcement, such as the Australian unemployment rate or the RBA cash rate announcement.。

3.The most favorable trend in the foreign exchange market

When a Forex trend is formed, it may last for a while。The trend of the forex market is bigger than any other market, you can jump on the trend and until the end。

This means that you can develop strategies that bring greater returns when trading forex, and if the entry point is well designed, you can increase the risk-reward ratio of trading。

The forex market is the place of choice for savvy traders who, due to the trending nature of this market, appreciate the opportunity to choose low risk, high return。

4.Foreign exchange market commission-free trading more

The cost of forex trading is very low as no brokerage fees are required to execute orders, which means you can buy and sell AUD / USD or EUR / USD commission-free。There is a cost in foreign exchange trading, i.e. the spread, i.e. the difference between the bid price and the ask price.。

When trading major currencies such as EUR / USD, GBP / USD, AUD / USD or USD / CHF, this difference is small, so your transaction costs when trading in this market are lower than any other instrument。

5.The foreign exchange market facilitates the use of leverage

Finally, by moving the currency a few cents at a time, you can leverage the currency to the benefit of trading it.。This means that with a small amount of cash bet, you can control a large amount of currency。

Usually, you can trade a $100,000 position in your account for as little as $1,000 (usually less)。Leverage is a good thing if managed properly, but can lead to considerable losses if not handled properly。Leverage simply means that you can make greater profits and greater losses, and you don't need to know the entire position size in advance to control the trade。

When trading forex and small amounts, managing your risk is crucial, while building your trading confidence and determining which trading and risk management approach is best for your situation。

As you can see, the Forex market offers a lot of liquidity, limited opportunities for short jumps, and leverage.。It makes sense for traders to use it as their preferred trading tool over other tools。

First of all, you'd better get a real demo account from a reputable forex broker and test the waters with virtual currency。Build your confidence in the system, open a real trading account under the right circumstances and start small transactions。

Start Forex Trading

Forex trading is not for everyone.。However, if you are keen to try forex trading, start with a demo account offered by a forex broker to gain enough knowledge of market trading。Also, as a new trader, you'd better learn trading strategies before you start。