Forex Trading Is So Popular

It may be helpful to first explain what forex trading is. Forex trading is also known as currency trading, foreign exchange trading, currency trading or forex currency trading. It is the largest financial investment market worldwide. Forex trading is entirely electronic. Myforexfunds The average daily capital turnover amounts to $1.5 trillion. This volume of capital changes is greater than the stock and commodity markets.Forex trading involves simultaneous buying and selling of one currency. Forex investors would sell EUR/USD if they believed the Euro Currency would fall against the US Dollar.Forex trading is based on the strongest currency being listed first in the pair. The only currencies that are valued higher than the US Dollar is currently the European Currency (EUR), Australian Dollar (AUD), and British Pounds (GBP).

Forex trading companies often charge no commissions. The pip spread is a compensation for the forex trading company as well as the introducing broker. A EUR/USD pip spread could be as little as 3 pips, which is equal to $30. The total transaction cost for the investor is $30.

Forex trading is popular because it offers a low risk of capital loss. Some forex trading platforms prohibit trading if the account equity falls below the required margin level. This service is offered by forex trading platforms. It will instantly liquidate currency positions, before the account can become negative. Forex trading does not have margin calls that investors need to be concerned about.