Why trade the Forex?
This is likely one of the questions for which you need a good answer. There are a lot of different investments you can choose from, so why trade foreign currencies instead?
Forex investment is unique in various aspects.
Compared to other markets, it has a large number of trades.
It is very liquid, which means that it is easy to buy or sell the currency without causing the market price to change much.
It has the most traders and the most kinds of traders.
It is one of the markets that is open for business 24 hours a day (except on weekends).
There are places to trade almost everywhere, not just in the U.S. or in Europe's big cities.
There are many things that can change the exchange rate.
According to the Triennial Central Bank Survey of the BIS, the average turnover on the traditional foreign exchange market is about $1.88 trillion per day. This is a huge number that will make you want to trade in Forex (Bank for International Settlements). Here are the average daily trading volumes on the Forex market over the last 17 years:
$500 billion (April 1989)
$750 billion (April 1992)
If you just look at the numbers, you can see that the average trend of Forex turnover is going up. It is thought that it could reach 2 to 3 trillion dollars in the next 8 to 10 years if the number of traders around the world keeps growing. In fact, everyone has a chance to get a big piece of the Forex market's wealth, especially now that Forex trading marketing is starting to be done automatically.
The new trend in the foreign exchange trading market is the idea of automating things. The automated method has also been thought of for the Interbank spot Forex market.
A Forex trader can get a lot of benefits from automated Forex trading. Here are some of the reasons why Forex trading and other investments (such as futures and commodities) like the automated process.
Transactions can now be done in real time because of automated processes. Even though manual systems have been around for a while, it is hard to get the same benefits that an automated Forex system can give its traders. All the trades can happen in a few milliseconds, which is a big advantage of the automated system over the manual one. In fact, there are problems that can be fixed by using automated Forex trading. For example, if a trader loses a few times in a row and can't make any more trades, he can use automated Forex trading to help him. The automatic trading system could be used to solve this kind of problem.
You will have more options if you use automated Forex trading. It means that you can trade at the same time in different markets in different time zones. You can trade with traders in Singapore or London even if it is already midnight in the US. This benefit gives you more than one exchange model to choose from. Different trading models can be used to look at short-term data. This means that you will only be able to predict the trend for a short time, say 15 minutes to 30 minutes.
As was already said, the Forex market is special because it is so liquid. When the market is run by computers, this liquidity goes up.
Forex trading that is done automatically solves problems with risk management. International checks, which are often used to buy things on the Forex market, are kept in sync by technology. Since transactions in an automated process now happen in real time, there isn't much chance that payments will be late. This makes it less likely that either party won't pay. Even though there have been problems with the automated system, they can be fixed by keeping the technology up to date.
With automated Forex trading, the prediction that the market will turn over an average of $2–3 trillion per day in the next 8–10 years could change in the next 4–5 years. Due to the fact that trades can be made quickly and well in different time zones, automated Forex trading is now one of the most profitable businesses in the world.
