Benefits of Trading in Currency Market

• Low Commissions: Brokerage fees are very low as the market is highly competitive.
• No Middlemen : Futures/Options currency trading does away with the middleman and allows clients to interact directly on the exchange platform.
• Standardized Lot Size : In the futures markets, exchanges determine lot or contract sizes which are fixed in nature. This allows traders to trade in multiple lots.
• Low Transaction Cost : The retail transaction cost (the bid/ask spread) is typically less than 0.1% under normal market conditions. In large deals, the spread could be as low as 0.07%.
• High Liquidity : With an average trading volume of over $4 trillion per day, Forex market has high liquidity. It means that a trader can enter or exit the market at will in almost any market condition.
• Instant Transactions:This is a very advantageous by-product of high liquidity.
• Low Margin, High Leverage: These factors increase the potential for higher profits (and losses).
• Online Access: The big boom in Forex came with the advent of online trading platforms.
• Interbank Market: The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and by telephone. There is no organized exchange to serve as a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The Forex market operates in a manner similar to that of the NASDAQ market in the United States. Thus, it is also referred to as an over-the counter (OTC) market.
• Self-regulatory: The Forex market is so vast and has so many participants that no single entity, not even a Central Bank, can control the market price for an extended period. Even interventions by mighty Central Banks are becoming increasingly ineffectual and short-lived. Thus, Central Banks are becoming less and less inclined to intervene and manipulate currency prices.
• No Insider Trading: Because of the Forex market's size and non-centralized nature, there is virtually no chance for ill effects caused by insider trading. Fraud possibilities, at least against the system as a whole, are significantly less than in any other financial instruments.
• Limited Regulation: There is limited governmental influence via regulation in the Forex markets, primarily because there is no centralized location or exchange.