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The Forex market is renowned for being the largest of all the financial markets by trading volume. A 2019 report by the Bank of International Settlement (BIS) put the daily trading volume at $6.6 trillion, a figure that is expected to grow at an average of 8% every year. As a result, the forex market attracts hundreds of thousands, if not millions, of traders. Even more and more newbies keep flocking to the market to tap into its unique features. But what exactly are those features?
Unique Features and Benefits of the Forex Market with Olymp Trade
Largest Market in the World
As earlier stated, the forex market is the largest in the world, with $6.6 trillion in daily trading volume. This means that the market is always liquid. That is, there is almost always activity in it. A trader cannot get “stuck” in this market, as there is always a counterparty to take the other end of his/her trades.
Flexibility and Trading Hours
One very unique feature of the forex market is that it is open for 24 hours for at least 5 working days of the week. This is unlike many other financial markets. The stock market, for example, typically opens at 9 am and closes in the evening. As a result, you are limited to just making profitable trades as a stock trader during those hours. However, a forex trader can tailor his trading to his current lifestyle and daily living without really upsetting anything. Consequently, the forex market is compatible with many strategies – you can be a scalper, a day trader, or a long-term investor. Hence, no matter your approach, the forex market is almost always open for you.
Accessibility and Low Barriers to Entry
In addition to the above benefits, the forex market is surprisingly one of the easiest markets to enter, due to the ridiculously low entry barriers compared to other markets. For instance, the price of just one single share of Amazon Inc. hovers around $2,000. That means for you to take a position on this stock, you must have up to $2,000, and that is still for a single share! Also, to trade commodities such as oil or gold, you either need to set up complex infrastructure or spend large sums of money to actually buy those materials. An ounce of gold, for instance, costs approximately $1,800. Needless to say, this factor prohibits many retail traders from participating in these markets. The only option most of them have, therefore, is derivatives. On the other, with leverage, you only need to put down a small amount of money (as low as $500, or even smaller) to take up large positions in the forex market.
Ability to Make a Lot of Profits
Due to the benefits that leverage provides, small price movements in the forex market can be magnified into bigger returns. However, leverage can potentially work against a trader as well when those movements are in the opposite direction to his trades.
How to Trade Forex
While there are several ways to make money from speculating on the forex market, the two broad classifications are Physical market and the Electronic market.
The physical market involves the actual buying and selling of one country’s currency in exchange for another. In essence, you give up the currency you have with you in exchange for another country’s. You normally do this when you want to conduct a transaction with the other country’s currency, and not really for speculation or investment purposes. The risks involved are great, but the potential profits are usually not worth it.
Here, you don’t need to buy and own any currency or exchange one currency for another. Usually, you are not interested in the underlying currencies but rather in their price movements. Both retail and institutional investors play in this market for profit’s sake. There are several ways or “products” with which traders speculate in this market, and they are collectively known as derivatives. Those ways are summarised below:
Forex Futures are agreements between certain parties to buy or sell a currency (forex) at a future date, hence why they are called “futures.” In essence, forex futures agreements contain the price at which the currency will be bought or sold and the particular date at which the exchange will be done. You profit from the market when your prediction of what the market will be at that specific date or period turns out to be right.
Like stock ETFs, forex ETFs essentially follow the performance of the particular underlying currencies for which they were designed. That is, their value moves in correlation with their underlying currencies. So, for example, an ETF that was designed to track the movement of the Dollar will increase if the Dollar increases. Correspondingly, it will fall when the also Dollar falls.
Forex Spread betting
Forex spread betting essentially involves taking a bet on the direction of a currency pair. Your profit (or loss) depends on how the market moves in favour of your trade, or against it.
Forex Contracts for Difference (CFDs) entail profiting from the difference in underlying currency pairs’ prices. That is, here, what the trader is concerned about is the movement or change in the price of a currency pair at any point in time.
Forex Binary Options
By far, this is the fastest-growing means to trade forex. First, forex binary options give you the ability to bet on currency pairs’ directional movements. With them, if you believe that the price will go up, you choose a “Buy” or “Up” trade. If you speculate it will go otherwise, you choose a “Sell” or “Down” trade. Binary options offer ample opportunities to make profits from the directional movements of currency pairs. You can be given a fixed payout of as high as 90% or even more just for getting market moves correctly after a set time.
As you are already aware, to trade in any financial market at all, you need a broker. One of the best binary options brokers you can find around is OlympTrade. So, what should you know about them?
Why Should you trade OlympTrade Forex?
OlympTrade offers one of the best platforms to make profits from the forex market, through the instrumentality of binary options. It provides an array of services designed to make your trading much easier. These services include:
- Trading Bonuses: OlympTrade supports your trading “hustle” by giving you trading bonuses. These, from the welcome bonus given when you sign up to the regular deposit bonuses, as well as promotional bonuses doled out from time to time, are added to your account to provide you with the ability to take up more positions.
- Regulation: OlympTrade derives its credibility from being registered with one of the most notable financial regulators in the world, the International Financial Commission (FinaCom).
- Customer Support: OlympTrade offers 24/7 customer service channels accessible via phone, email, and the live-chat function on its website. Realistically, this is somewhat rare in the brokerage world.
- Trading Education: OlympTrade gives you access to a structured trading course as well as well-prepared educational materials. It also posts weekly blogs teaching trading and trader lifestyle.
Types of OlympTrade Forex Trading Accounts
There are basically, three types or “levels” of live accounts that you can choose from as an OlympTrade forex trader. They are:
- Starter Status: The Starter Status account is issued when you deposit between $10 and $499. 82% is the maximum payout rate for a correct trade.
- Advanced Status: When you deposit between $500 and $1,999, you are issued an Advanced Status account. Benefits that come with this include increased payout for successful trades to 84% as well as access to numerous trading strategies and guides.
- Expert Status: This is issued when you deposit anything from $2,000 and above. Benefits attached to this include maximum payout rate increasing to 92% and the ability to make risk-free trades.
There are several ways to profit from the movements in the prices of currency pairs of countries globally. One such way is through trading binary options. To, however, experience stress-free trading, you need a good forex binary options broker. OlympTrade forex trading is arguably one of the best recommended you can find.