10 main benefits of trading in the Currency Market

Introduction

The idea of Currency Trading excites you. But you are on the edge when it comes to deciding whether it would be the right avenue for you to make money. Well, we can help. Here are the primary benefits of trading in the Currency Market and the exclusive advantages compared to trading in other asset classes. If you think these benefits could reap you some profits, then maybe it is time to act:

High liquidity

Liquidity is the ease with which you find buyers or sellers for your asset in the market. Higher the trading volume, higher the liquidity, and higher the chances of your trades being successful. The Forex Market is called the most liquid financial market in the world. This also means that large volumes of currencies are bought or sold without causing too much price movement.

High leverage

Leverage is an investment trick of using borrowed money to place your trades. High leverage in Forex Trading allows traders to borrow funds from a broker, increasing their exposure to the market and generating more with less. For instance, if the leverage is 1:10, the broker multiplies the size of the trader by 10 times.

This gives traders a chance to generate more profit even if they do not have enough funds to trade. But remember that high leverage also results in multiplied losses if your trade goes reverse.

24x7 market

Forex Trading remains active 24*7, with trading happening across time zones in different parts of the world. The trading time on Indian bourses is between 9 AM and 5 PM. Since Indian traders can take a position easily in the international currency market, they trade effectively anytime, making Currency Trading a more flexible option regarding time.

Highly accessible

The foreign exchange market is the largest financial market globally, with an average of $4-5 trillion traded daily across the world in currencies. Traders, big and small, from the globe can trade in currencies easily, making forex a truly accessible market for all investors.

Decentralised market

The best part about the Currency Market is that any single entity does not control it. Many participants from the globe make this market, which is why a player/handful of players cannot dominate or manipulate prices.

No special permits

Currency Market allows anyone and everyone to place their trades and get going. You do not require any special training. Only open a Trading Account with a registered broker and manage some initial capital. Online trading has made things simpler, giving you access to the global Currency Market with the help of a data connection.

Technology

Most forex brokers today provide traders with their proprietary online trading platforms that incorporate the latest technology. Access your Trading Account with your smartphone, placing orders within seconds while also getting real-time data on currency movements worldwide.

More money-making opportunities

One of the main benefits of the Currency Market is that it allows traders to trade both the highs and the lows of the market. There is plenty of trading opportunity available always, irrespective of whether the markets are rising or falling. You must speculate the correct movement of the currency (whether up or down), and you are sure to make money.

Hedging

The Currency Market allows importers and exporters, whose earnings depend on the foreign exchange rate, hedge against unfavourable forex rate movements. This helps in safeguarding their money.

Arbitrage opportunities

Traders can also make money here by arbitraging. As currency derivatives get traded on National Stock Exchange, Bombay Stock Exchange, and Metropolitan Stock Exchange, there is usually a minor difference among prices of the same currency contract on all three exchanges, creating an opportunity to profit.

Disclaimer - ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.