Why Forex trading? This is probably one of the questions that you need a reasonable answer. There are hundreds of investments out there that we may prefer, but why go instead of trading foreign currency?
Forex investment is unique in various aspects.
Its volume is relatively large compared to other markets.
It has extreme liquidity or the ability to purchase or sell the currency without causing significant movement in the market price.
It has the largest number and variety of traders.
It is one of the markets that have long trading hours (24 hours per day except on weekends.
Trading locations are almost everywhere, not only in the United States or major European cities.
There are various factors that influence the exchange rate.
Another whooping fact that will make you very happy to go on Forex trading: it has an average turnover of traditional foreign exchange market of around $ 1.88 trillion per day, according to the Triennial Central Bank survey of the BIS (Bank for International Settlements). Here are the daily averages of turnover on the Forex market for the last 17 years:
$ 500 billion (April 1989)
$ 750 billion (April 1992)
$ 1.18 trillion (April 1995)
$ 1.48 trillion (April 1998)
$ 1.16 trillion (April 2001)
$ 1.88 trillion (April 2004)
From figures alone, you will notice that the average trend of Forex turnoveer is rising. It is estimated to achieve the highest 2 to 3 trillion dollars in the next 8 to 10 years if the number of operators worldwide will continue to increase. In fact, everyone has the chance of getting a substantial slice in Forex market wealth, especially that the Forex market is now on its automation process.
The concept of automation is the new trend for the rate of exchange trading market. The interbank forex spot market has also considered the transition to the automated method as well.
There are several advantages that the Forex trader can derive from automated Forex trading. Here are Some of such benefits on why Forex trading as well as other investments (futures and commodities) prefer the automated process.
Through automated processes, transactions can now be done in real time. Although manual systems have existed for some time now, it is difficult to achieve these benefits that the automated Forex system can offer its traders. All trades can occur within milliseconds and can be a big plus for automated transactions against the manual system. In fact, there are problems that are addressed using automated Forex trading especially if the trader is losing a few times in a row that prevents him from making new trades. These problems could be addressed using the automatic exchange system.
With automated Forex trading, you will have greater diversification. This means you can share in various markets in different time zones at once. You can execute trades with traders from Singapore or London even it is already 12 midnight in the United States. This benefits allows you a multiple exchange option model. You can use different models to evaluate short-term data. This means that you will be able to predict trends for a short period of time, say from fifteen minutes to half an hour.
As noted above, the Forex market is unique because of its extreme liquidity. This liquidity is increased when the market is automated.
Risk management problems are solved through automated Forex trading. International control, which are commonly used to make purchases on the Forex market, are synchronized through automated technology. Since the operation in an automated process is now in real time, there is a slim chance that the payment will be delayed, reducing the risk of non-payment by either party. Although there are problems with the use of the automated system, it can be fixed through constant updating of technology.
Automatic forex trading with the market, forecasting $ 2.3 trillion average daily turnover in the nest 8 to 10 years can be changed in the next 4 to 5 years. Given the quick and effecient operations in different time zones, automated Forex trading is now in the lucrative business in the world.