Why is forex trading becoming so popular?

At first glance, it’s apparent that forex trading has become increasingly popular in recent times, with an estimated $6.6 trillion (£5.09 trillion) traded globally during each 24-hour period as of Q4 2019.

While the popularity of this global forex trading marketplace is hard to dispute, however, the reasons behind this are considerably more diverse and slightly harder to pinpoint.

We’ve addressed these in the post below, so that you can begin to understand the unique benefits of forex trading and why it appeals so broadly to traders.

1. Ease of access and informed decision making

Let’s start with the basics; as the forex market (or the foreign exchange) has become increasingly accessible to aspiring and part-time traders during the digital age.

To this end, a host of online brokerage platforms have emerged to connect traders to the real-time marketplace, with these sites also offering access to several marketplaces and comprehensive analytical tools.

This not only creates a scenario where traders can simultaneously access the live global exchange and insightful datasets that are capable of informing their decisions, but it also enables them to navigate a marketplace that operates for 24-hours a day and covers three separate trading sessions.

2. Demo accounts and bridging the gap between theoretical knowledge and practical experience

On a similar note, traders will also know that these brokerage sites feature demo accounts which can be operated for between three and six months on average.

There are multiple benefits to operating a forex demo account, which offers access to a live marketplace that simulates real-time conditions and price movements. In this respect, it enables you to bridge the often sizable gap between theoretical knowledge and practical experience, without requiring you to risk your hard-earned capital.

During this time, you can hone your trading strategy and identify new market opportunities, affording you a distinct competitive edge when you finally enter the corporeal exchange.

3. Boost your income and diversify your interests

If you’re already established as a slightly risk-averse investor with existing assets such as dividend stocks, it’s fair to say that the forex market and derivative instruments such as currency offer an excellent opportunity to diversify your portfolio.

Successful forex trades certainly enable you to access enhanced leverage and sizable profits, which can boost your overall return and compliment the frequent but more modest gains generated by traditional stock trading.

This translates into additional income and higher earning potential, especially when you consider that there are no commissions associated with forex trading and considerably favourite margins.