Maybe you’ve heard about what trading FX is all about from a friend, read it somewhere in the news, or seen an ad about it on Facebook or some other social media. However, you probably haven’t considered trading FX yourself so far and using an online trading provider; visit Juno Markets for it.
We understand that the trading world is sometimes overwhelming and requires carrying out some of the most intimidating tasks, but with our easy guide on how to do it and which provider to choose, it will become a piece of cake for you.
Reasons you need foreign exchange
FOREX (foreign exchange) is all about exchanging one currency for another. A trader will buy one currency while selling the other simultaneously, hoping that the purchased currency will rise in value. In the past, this process was only possible in banks, more giant corporations, and high-net clients who traded with brokers through the phone.
The rise of the internet in the 90s made FX trading possible for all of us. The reasons to trade FX are pretty straightforward. It’s the fastest-growing market globally, with more than %5.1 trillion US dollars flowing through it daily. If you compare it to the American stock market, you’ll see that it’s 20 times more.
Comparing forex and stocks shows numerous advantages of FX, like the leverage, which goes up to 500x for FX instead of the 2x for stocks. The starting capital for FX is $100, while it’s $5,000 for stocks. And the trading hours for FX are all day, whereas you can trade stocks in the gap of eight hours.
The top benefits of Forex
When traders pick a market they want to trade on; they want the best trading conditions because they’re always interested in profit. The reasons why traders from all around the globe think that forex is the suitable market for such profit while meeting all the criteria they need are numerous. We will focus on the top five benefits to show you why trading in forex is worth your while.
You can go both long and short
When you use derivative products, you can go short on most markets. But with Forex, selling short is considered to be an inherent part of the market. The reason for this is quite simple – you’re always selling just one currency and are purchasing another currency. The price of such a pair in Forex is worth as much as one unit from your base currency is worth in the unit of your quote currency.
For example, GBP can be your base currency, and EUR can be your quote currency. If you’re trading at 1.12156 GBP/EUR, one pound will be worth 1.12156 EUR. Now, if you think the pound is the one that will increase, you should buy the pair (go long).
If, on the other hand, you think that the pound is the one to decrease, you should sell the pair (go short). Your loss or profit will depend on whether you make the right prediction, so that means you can profit, regardless of which way the market goes.
All-day-long trading hours
The Forex market is open 24/5, which means you can trade all day long, five days a week. The market opens at 9 pm on Sunday and closes at 10 pm on Friday (GMT). Since parties complete their transactions on Forex directly and OTC (over the counter) and not through a central exchange, such flexible trading hours are excellent.
Moreover, Forex is a global market, and you can track different trading sessions from all over the world with such convenient trading hours.
You can trade a great variety of currency pairs
At Forex, you can trade a great variety of currency pairs that speculate on the global events and the strength of both minor and major economies. There are different types of most common pairs such as:
- Exotic – EUR/CZK, USD/MXN, TRY/JPY
- Emerging – USD/CNH, AUD/CNH, EUR/RUB
- Minor – USD/ZAR, CAD/CHF, SGB/JPY
- Major – GBP/USD, USD/JPY, EUR/USD
You can trade these pairs through a single login via the same account.
The hedging technique
This technique can reduce your risk of making unwanted moves on the Forex market. Hedging opens a couple of strategic positions and is a great way to mitigate loss or limit that loss to a particular amount. One of the most common hedging techniques is multiple currency pairs.
Choosing pairs in Forex that positively correlate, like EUR/USD and GBP/USD, will lower your risk of meeting a downside. For example, if there’s a loss on a short position, you can mitigate it with a long position.
The leverage technique
The leverage technique enables you to create and open a position on the Forex currency market just by paying a small amount of the full value. If you make a profit, it will reflect the full value. Therefore, trading on such margins can help you make large profits.
However, it can also lead to great losses, to a point where your loss can exceed your initial deposit. Therefore, you should always consider the total value.
Why choose Juno Markets as your online trading provider?
Juno Markets is one of the leading online trading providers for CFDs, Precious Metals, and Forex. Here’s what they have to offer and why you should choose them:
- Transparency – you’ll get only the best trading environment and no “funny business”;
- Service – you can email, call, and chat with Juno Markets, where a team of professionals will solve all your dilemmas and issues;
- Low spreads – Juno Markets provide raw pricing from banks directly, which means there are no spreads and markups;
- License – Juno Markets has a principal’s license from the Vanuatu Financial Services Commission;
- Fast withdrawals and deposits – you can trade and deposit 24 hours a day fast;
- Technology – Juno Markets’ server is in the top data centers of the world.