The Benefits of Forex Trading
There are so many investment opportunities in today’s market that are becoming more and more accessible to interested individuals. Whereas before, the foreign exchange market largely consisted of corporations, governments, and banks, today, practically anyone can trade forex as long as they have enough capital. As with any investment, forex trading also requires a certain degree of knowledge and research — but all these can definitely be worthwhile. On that note, we’ve listed a few advantages forex trading has that may just entice you to consider investing in it.
The market is open 24/5
Unlike stock trading, All Africa explains that the key advantage forex has is that the market is open practically 24 hours a day. After all, it is a global market, and as long as a market is open somewhere in the world, trading is definitely possible! It’s open from Sunday evening at 8.30 pm GMT to Friday evening at 9 pm GMT— in other words, it pretty much never sleeps.
It has high liquidity and volume
Of all the markets, forex is the largest and most liquid one in the world, with an average daily trading volume exceeding $5 trillion (Sh519.20 trillion). So whether you’re buying or selling currency, FXCM’s article on ‘What is Forex’ explains that it’s easy to find buyers and sellers compared to other markets. For those starting out, the learning opportunity here is great as the market is always moving, allowing you to observe and learn what is usually traded and what to avoid. Moreover, high liquidity means you can move large amounts of money in and out of foreign currency with little to no price movement.
You can do it online
Another benefit of forex trading is that you get to do it online — when you get home, or even at work. This makes it a great side hustle, especially since it’s open all the time. However, it’s important to know the right platforms to go on, as the Capital Markets Authority has warned Kenyans against engaging in online foreign exchange trading through unlicensed entities. Look for local or foreign licensed firms to work with, such as EGM Securities, to avoid losing your money and to stay protected under the law.
It’s easy to start
Given that you can trade online and at any time, starting out isn’t that hard — you only need the right amount of capital and a determination to learn how the market works. Moreover, aside from opening online accounts, you can also open managed accounts with brokerage firms, allowing you to expose yourself to the forex market even if you lack the time to manage your investment.
You don’t need a lot of capital to begin
Compared to trading stocks, forex trading doesn’t require a ton of money. A lot of online forex brokers have mini and micro trading accounts, with finance reporter Jimmy Mwangi pointing out that some even have a minimum account deposit of just Sh2,500. Although this doesn’t mean you should open an account with the bare minimum, it just goes to show how accessible forex trading is to the average individual.
In a nutshell
With easy platforms to start on, a 24/5 market, high liquidity, and a low level of required capital, anyone can easily start forex on a part-time basis. Find a platform you can start with today, and learn the ropes of forex trading for passive income and a better financial future.