Currency FOREX Online Trading

Currency FOREX Online Trading

by Han Ming

There are few advantages ofonline FOREX trading compare to offline trading. First advantage is accessibility. You're able to trade FOREX 24 hours a day, 5.5 days a week. The currency exchange market is an over the counter market which means that there is not one specific location where buyers and sellers meet to exchange currencies. Transactions can be effortlessly handled through websites designed for this purpose.

Another huge benefit you can get is there is no exchange or commission fee. This means you can cut down transaction costs with online trading. Unlike other markets where brokerage fees are incurred, the FOREX market is a worldwide inter-bank market. Trades can be made between the buyer and seller in an instant.

Online trading gives you low minimum investment. For an initial investment, you can start as low as $50. You donâ't have to fear losing a whole sum of your money. You can just test the water first and see if online FOREX trading is suitable for you. If you find that it is not suitable, you can always leave the market.

When choosing an online FOREX trading, look for the platform that has the most competitive spreads. Currencies are normally traded in pairs of ask bid price. The difference between the bid and ask price is known as spread. For example of AUS/USD 1.3345/1.3350, the Forex quote here means you can buy 1 Aussie Dollar with 1.3350 USD or sell 1 Aussie 1.3345, and the spread is (1.3350 - 1.3345) which equals to 0.0005 and equivalent to 5 pips. FOREX platforms often do not charge commissions on investors’ trades because they are making money from the spreads. If the spreads are low, this means they are offering a cheaper service and thus traders have better profit value. Then, of course the more competitive spreads the better.

Some platforms have high spreads and this will increase your trading costs. Also, some online FOREX trading platform has hidden costs. So, choose carefully which online platform you want to go before investing your money there.