Before we begin explaining why Forex trading is so popular, we will first tell you a bit more about trading and the Forex market. As an activity, trading has always been portrayed as a premium occupation that opens doors for an enviable lifestyle. Traders have also been illustrated by the media as stressed individuals, who are usually young and spend most of their working time in front of multiple displays, have lunch at expensive restaurants and finish the day in glamorous clubs. You may imagine that trading requires you to have a business degree, perhaps even an MBA, and that it also requires a six digit capital. The truth behind this is that this is all in fact a lie. Trading is completely different. In fact, there are in fact millions of traders throughout the world. What makes trading so popular? The main reason is that there are many individuals with an entrepreneurial spirit that are looking to achieve extraordinary lifestyles with their analytical skills, market knowledge and bravery.
So, if there are millions of traders, what do these people actually trade? Trading instruments range from from the well known stocks of blue chip companies to exotic items such as futures on orange juice. What is the most popular trading market? People trade a lot of assets, but the largest turnover is created in the Forex Market. What makes Forex trading so attractive? The majority of Forex transactions are executed by banks, large multinational trade organisations, hedge funds and private investors. While private investors range from small to big, around 5% of the daily Forex volume is in fact composed of retail Forex traders. This might sound small to you, but 5% stands for around 250 billion US dollars in daily transactions. The foreign exchange market started accepting retail clients as soon as internet access became a widespread. Right after the invention of the internet, a few Forex brokers appeared and started servicing retail clients via their proprietary Forex trading platforms. It took nearly a decade for the Forex market to become an attractive place for retail traders, this has mainly happened due to the development of currently the most common trading platform - MetaTrader 4. While this platform is certainly great, Admiral Markets never stops in striving for perfection, this is why we supply our clients with the top-notch update - MetaTrader Supreme Edition. Coming back to the Forex Market, today there are trillions of US dollars traded daily and the number is growing. So what are the reasons that made the Forex market so popular?
Reasons why the Forex market is so popular
Below we will examine why foreign exchange became one of the most 'trendy' markets for retail traders in less than 20 years. These reasons truly make Forex a great choice for both beginners and experienced traders.
Ease of access
Unlike other markets where you have to deposit substantial amounts in order to begin your trading career, Forex trading can be started with quite a low deposit. Trading Forex starts as low as 100 USD. You can simply deposit 100 USD and test your trading skills with online Forex trading. Is this why Forex trading is so special? Not really, ease of access makes Forex trading popular, but the remaining items definitely tell us why Forex trading is so widespread. Let's have a look at them right now.
Demand and supply
With Forex trading you can expect to have almost immediate demand for the asset you have acquired in the past at almost any possible volume. This of course applies only to regular Forex trading conditions - sometimes Black Swan events happen on the Forex market and due to the enormous price changes it becomes quite hard to trade. The good news is that such events are quite rare. During normal market conditions you can stay safe in the knowledge that your trades could be executed within seconds, as there is a constant demand and supply for the currency units. In Forex terms, this is known as liquidity and Forex is considered to be the most liquid market.
Advancement in technology is a great feature of Forex trading, and this is what really makes Forex trading so special. Why is Forex so advanced in terms of technology? The amount of Forex brokers is great and the competition on the market is severe. This is why Forex is such a competitive market, which requires brokers to supply the best possible terms to their clients. While competing on trading conditions certainly costs brokers money, investments into the trading platforms help brokers achieve a higher market share, while keeping the larger income for themselves. Some brokers prefer to invest funds into the development of their custom trading platforms, while Admiral Markets supplies you with updated versions of the most common trading software - MetaTrader 4 Supreme Edition. In addition to this market leading Forex trading platform for desktops, Admiral Markets lets its clients trade Forex online via MetaTrader 4 apps for iOS and Android devices. On top of that, with Admiral Markets you can install a native Mac OS MT4 app for your Apple laptop or desktop. This is certainly comfortable for Mac Users, as they do not have to struggle with Wine and Wine Bottler apps. Once you give Forex trading a try, you will see that developments in trading software are a clear reason for Forex's popularity .
As Forex trading emerged and grew with the development of the internet, retail traders have been looking for additional information in order to excel in their trading potential. This has led to the birth of an enormous amount of Forex trading forums with a number of active contributors. What is more is that you can even find Forex related information in almost any language. As the market works 24 hours a day, five days a week, there are Forex traders all over the world. Next to the forums with high post frequencies, there are also new ways to communicate for Forex traders. Even though there are a large variety of Forex trading groups on Facebook, Forex has evolved into something bigger. There are even many special social networks that are designed for Forex traders. Forex trading has gone beyond mere communication and grown into action. This is why Forex is so interesting, as this market has given way to what is known as social trading.
Forex is the market where marginal trading is made easy. This is also why Forex is so accessible. Thanks to the high levels of leverage offered by Forex brokers, you can now trade much higher amounts than your actual deposit. Usually you have to put in a margin which is up to 500 times smaller than the actual size of your transaction. This is commonly known as leverage, and this is the main reason why Forex is so accessible to retail traders. Unlike other markets where you have to have larger capital in order to make large trades, in Forex, through leverage ,you can increase your market exposure, whilst keeping your deposit small.
Available demo accounts
If you would like to try your hand at trading and see if this is a suitable market for you, Forex welcomes you without the requirement of a deposit. You can sign up for a paper trading account and start practising Forex trading within just a few minutes. This does not require a deposit or any other commitment from your side, the only thing that you need to do is sign up for a demo account with Admiral Markets and demo account credentials will be instantly supplied to your email address.
Demo accounts come with no strings attached, you can trade as much as you want and be sure that your account will not expire if you trade actively. The conditions on a demo account are as similar to live trading as possible, so you can master your skills trading virtual money without making a deposit. This is why Forex is so easy to start with.
What to do you have to keep in mind is that Forex involves a high degree of risk, like any other trading market, or perhaps even higher. Forex trading is carried out on a margin basis and Forex is quite a volatile market, and due to these factors, even a relatively small price fluctuation can lead to substantial profits or losses. This is why Forex is so risky, especially when a trader tries to achieve too optimistic results within a short period of time. You should ensure you understand all of the risks before starting to trade Forex.