Currency Trading

Currency pairs or Forex is one of the most popular asset classes in the financial markets. With more than $6 trillion in daily trading volume, the forex market is undoubtedly the largest financial market in the world.

What is Forex or currency trading?

Forex or currency trading refers to the buying or selling of currency pairs in order to profit from the fluctuation in the exchange rates between two national currencies.

The forex market is a massive network of major banks and other key financial institutions where different currencies are traded against each other, based on their exchange rates.

While currency trading was originally reserved solely for high-net-worth individuals, today it’s widely accessible by everyone through CFDs.

Retail traders can access opportunities in online currency trading very easily and safely through a licensed broker. Currency trading is increasingly popular with investors and speculators due to the lower-barrier-to-entry, low trading costs and the potential for high returns.

Traders can take advantage of CMTrading’s award-winning platform to trade a wide range of financial assets either through their PC or smartphone.

What are the Pros and Cons of Forex Currency Trading?

Currency trading offers multiple key advantages for traders of all experience levels:

  • Access to leverage:Leverage allows investors to trade positions with higher value than their current account size can afford. Therefore, high leverage can provide higher returns as well as higher potential losses.
  • Flexible trading approach:You can adopt a highly aggressive or a more conservative approach according to your risk tolerance.
  • 24/7 operation:There’s always a Forex trading market open. Markets only close on weekends for a short period. You can trade whenever you want.
  • Reduced fees:Many markets, like the stock exchange, carry punitive fees.
  • Online platforms and automated software:Most currency trading can now take place in the comfort of your own home. It’s also made it a lot easier to understand and work on the market. Automated currency trading software makes transactions for you, dependent on the instructions you give it.

By now, you’re probably thinking this sounds fantastic! It is- but as with anything in life, there are downsides to consider too. Here are the ‘cons’ CM trading suggests you bear in mind regarding Forex trading.

  • A fast [and volatile] market:You can make and lose money fast, and need to be on the ball when trading
  • Leverage:While leverage is a massive pro, it can also be a con, as unanticipated losses can be made worse.
  • Internet outages:Internet outages will adversely affect your trades, but you will be responsible for results.
  • Scammers:As with anything in life, scammers do exist, and appropriate caution is needed.

With this convenient links and tools you can review the Forex market history and analyze rate trends for any currency pair.

As with most things in life, learning Forex trading successfully comes down to you, how well you handle your investment and the work you put in. The cons needn’t be of any impact in your life if you plan well. Learn what you need to know to make informed opinions yourself, and don’t rely on others. Choose providers with solid credentials, and avoid emotional trading. With the right knowledge and attitude, currency trading success will be yours.

Trade on currencies with the South African fully licensed and award-winning Forex broker.