When compared to other markets, the forex market offers an easier path to making money when it comes to beginners. Since most people are already aware of and have likely dealt with, different currencies, grasping the fundamentals necessary to make one a competent forex trader is easier. Given the role that knowledge and information play when it comes to trading success, this fact alone gives most beginners a better starting point.
The magnifying power of leverage
Forex trading offers a unique opportunity for beginners because of leverage. This is because, with leverage, a trader can be allowed to control a significant position even when they don’t have a lot of money. As a result, the chances of winning big even as a beginner with limited funds are higher when trading in this market thanks to the high leverage levels that dealers, brokers, and banks allow.
24-hour market availability
With most markets, there is a limit as to when you can carry out trading activities. This means that within an extended period, you only have so much time to detect and then take advantage of opportunities. This is not the case with forex trading.
The forex market allows for the most trading freedom since it is a large enough market. Therefore, as soon as you download metatrader4 and then set your account up for trading, you essentially have access to the markets for 24 hours in a day, and for 5 out of every 7 days a week. This means that you will have more opportunities to spot winning trades, something that definitely translates to better odds of making money faster.
High liquidity opportunity
With forex trading, a beginner gets access to a highly liquid market. This is thanks to the fact that when you basically consider the volume traded on any given day, the forex market usually comes on top. It is an advantage in that a beginner does not have to hold on to their positions for extended periods. As soon as the market conditions are optimal, or as soon as their trading strategies call for it, they can easily exit a position in a fraction of a second. This is because there are always willing buyers and sellers in the market, something that increases the odds of quickly entering a profitable position and also getting out of it. As a result, this feature increases the odds of making the most of profitable trends as soon as they emerge, and limiting losses as soon as there are signs of the market moving against a given bet.
Lower fees and commissions
When you are starting out, keeping as much money as you can is important. This is because doing so allows you the chance to wait for the perfect conditions to make a winning trade. Fees and commissions charged by brokers tend to eat into the profit that one makes while trading. In fact, if not properly accounted for, they can be the reason why a person loses money.
However, when it comes to the forex market, the risks of fees and commissions being the reason why your investment gets wiped out are low. This is because when it comes to forex trading, brokers typically charge lower fees and commissions. And as a result, every trade that you make in the market carries significantly less risk of not turning a profit. For beginners, this is something that increases the odds of making money.
A lower barrier to entry
If you don’t have a lot of money to start trading, forex trading can still offer you the opportunity to make a profit. This is because in most cases, getting a basic account has a minimum requirement that goes as low as $50. Therefore, beginners can get started as soon as they gather the bare minimum, unlike other markets where they may have to wait until they acquire a sizeable amount. This increased accessibility makes it beginner-friendly and increases the likelihood of a beginner making a profit early in their trading career.