Currency Trading

1. 24-hour market

Where most stock exchanges are open from 9am-4pm (depending on the country where they operate), the forex market hours are continuous from the start of the week on Monday morning in New Zealand until it closes on Friday afternoon New York time. That means you can trade 24 hours a day, 5 days a week, giving you more trading opportunities.

2. Free education to become a successful FX trader

Forex trading is easy to learn but hard to master, so this is why many people refer to trading as a ‘journey’.

3. All trading styles work

With the ability to make profit by going long and short, you can be successful using a wide range of different forex trading styles. For example, there are a number of forex trading strategies that allow traders to use technical analysis and fundamental analysis to execute trades confidently while following thorough risk management practices.

The trading style you intend to use really depends on the amount of time and effort you have available to dedicate to forex trading, as well as your end goals. But there are plenty of trading styles to trial: price action strategy, day trading, scalp trading, swing trading, and many more.

4. Cost of trading is low with no commissions

To make things easier, forex brokers tend to take care of any fees associated with trading. This means you don’t end up paying for things like transfers, deposits, withdrawals, or exchange fees.

5. Range of risk management tools

There’s always going to be risk when investing money into a financial market, whether that’s forex, commodities, stocks, or anything else. Proper forex risk management techniques are essential for forex traders who want to become successful in the long term.

6. Leverage

The ability to use leverage in FX is one of the most appealing benefits of forex trading as it allows you to open a large trade position with a small initial investment.

The benefit of utilising leverage is the potential to increase your profits, but it works in the opposite way too, where it can lead to greater losses. So, when applying leverage you always need to carefully consider an appropriate level of risk.

7. Profit from going ‘long’ or ‘short’

In other markets, it’s quite common for CFDs to be used for going both long and short on an instrument. In the world of forex, it’s a critical component as you’re always selling one currency to buy another.

If we think the Australian dollar is going to increase against the INR then we would buy the pair (going long). If we think the opposite is going to happen, and the Australian dollar will get weaker against the INR, then we would sell the pair (going short).

8. Highly liquid market

Liquidity is a general term to describe an asset that can be bought in the market without affecting the overall price of that asset. Forex is considered to have high liquidity because the forex market is so large and there are so many people trading that it’s incredibly difficult to manipulate prices – even by someone trading very high volumes. So, liquidity is important because it keeps prices comparatively stable.

9. Start with small trade sizes

In forex, when you want to open a trade you need to choose the trade size, which is referred to as a ‘lot’. Your trade size will be determined by how many lots you are going to buy or sell in the trade. Lots are calculated using your account funding currency, and the lot sizes include:

Standard lot = 100,000 units of currency

Mini lot = 10,000 units of currency

Micro lot = 1,000 units of currency

10. Utilise technical analysis

The ability to read and understand charts, and utilise technical analysis, can be particularly useful in currency trading. 

Buyers and sellers of currencies on the foreign exchange market determine the rates of FX instruments in real-time, while central banks maintain stability and the volatility of the currency.

No one can perfectly predict the way the market moves, but by learning some of the most common technical indicators – like support and resistance levels and Fibonacci retracement – you can identify where currency pair lows and highs are and make more informed predictions about future trends.