Advantages of online Forex trading

Advantages of online Forex trading

Submitted by adil on Tue, 11/20/2012 - 10:11

Online Forex trading is facilitated by Forex brokers who play a vital role as they act as intermediaries in the trade. The Forex broker offers traders an online trading platform whereby he provides currency pairs for buying and selling. When selecting an online Forex broker, it is essential that you research well on their background since they will be involved with handling of your money. Even though, trading Forex through the internet might seem even riskier than offline trading, this kind of trading offers immense benefits to the traders. First, online trading offers the advantage of accessing the Forex market on 24 hours as the internet is able to concentrate all the global Forex markets into one platform. For instance, when London market closes, the New York Forex market opens and this cycle of opening and closing of different markets offers traders the convenience of trading at their time of choice.

Another advantage of online Forex trading is the leverage benefit. In this regard, Forex traders are given the opportunity of trading with leverage by the brokers. What this means in layman�s language is that the traders who have invested a small amount of money are able to trade with larger Forex amounts. For instance, in case the leverage is offered as 50:1, this means that a Forex trader can take home fifty times more cash than they actually invested. This is definitely a great advantage offered by online trading.

Trading Forex online also comes with the advantage of low transaction costs compared to other trading platforms. The transaction cost of Forex market is usually based on prices which is essentially the spread that exists between the selling and buying price of currencies. EUR/USD is essentially the most popular trading pair in the Forex market and most brokers will give a spread of 2 pips in this case. What this implies is that before you profit from this pair, you need to earn two pips. All in all, even with all these advantages of online Forex trading, you need to remember that the Forex broker you decide to trade with is key to your success.