Over the last decade forex trading has increased in popularity
which explains the continued growth of the forex market
. With daily turnover in excess of $5 Trillion the forex market has turned into the biggest and most liquid financial market
in the world. Growth is expected to continue as the amount of forex traders increases every day.
Institutional traders increase their currency trading desk as there are an ever increasing amount of opportunities to generate profits while the amount of retail forex traders is surging which adds even more liquidity to the currency markets. No other financial market has witnessed the exponential growth the forex market has experienced.
During times of crisis traders tend to pull their money out of equity markets and bond markets, but forex markets have not seen the same behavior from forex traders. Regardless of economic conditions the forex market continues to grow in size and adds liquidity. Market participants may pull money out of equity markets, but they do increase their portfolio size in forex markets.
There are several factors behind the growth rate as well as popularity of the forex market:
- The forex market is the most liquid market in the world and offers plenty of trading opportunities which allows traders to create a vast amount of trading strategies.
- Economic conditions do not matter as the forex market or currency market deals with currencies which are in demand regardless of what is going on. Currencies are the foundation of everything we do as a society and therefore the forex market will always be required.
- Traders can participate in the forex market 24 hours, five days a week as it does not close like other financial markets. This creates even more opportunities for traders which add to the popularity of forex trading.
- Forex trading is usually conducted with the use of margin which can allow forex traders with a good currency strategy to increase their profits even with smaller forex trades. It also works the same way in the opposite direction and trading with leverage requires good money management procedures as well as caution. Either way, high leverage has also been a reason why so many new entrants to financial trading opt for the forex market.
- Low entry requirements may in order to start a forex portfolio may be the ultimate reason why so many retail traders have flocked to forex trading. Traders can start with as little capital as they wish, but even a small $100 deposit can allow forex traders to start earning consistent profits. Traders need to have a stable internet connection and access to a computer or laptop and can get their forex account registered in less than two minutes.
Feel free to give PaxForex Trading Accounts a look and pick the one which best suits your needs in order to give forex trading a try. Low capital requirements and the leverage of your will give you a great starting point to your forex career. Then check out our free Forex Trading Guide in order to increase your knowledge about the currency market which will allow you to create a profitable forex trading strategy. In addition you can also take advantage of our PaxForex Trading Recommendations in order to assist your forex trading.