Historically, the Forex market is quite new. Even two decades ago Forex trading involved few national banks and large financial institutions. But, it has gained immense popularity in the recent past. Numerous private medium and small investors, non-government organizations and international banks have become a part of the Forex market now. Investors are tapping the limitless resources of this trading system. As a result, the foreign exchange market is booming and is considered to be more lucrative than stock exchange. Why do traders turn to Forex as an excellent opportunity for investment? There is more than one reason for this.

24 hour availability:
This is considered to be one of the greatest advantages of the Forex market. This round-the-clock availability allows traders greater chances for trading. Forex market opens with the New Zealand session at 3.00 p.m. EST and closes with the San Francisco session on Friday at 5.00 p.m. Transactions take place at every time zone. This allows traders to choose their opportune time for trading.

Liquidity:
Forex market offers highest liquidity. It is this characteristic that makes it different and more lucrative than other trading markets. It witnesses a daily transaction of 3 trillion US dollars. Hence, liquidity enables stability in price and better chances for trade executions. Traders are allowed to open and close transaction very easily. Manipulation of the market is not possible with such high volume being transacted on a daily basis.

Lower Investment:
The Forex market calls for a lower amount of investment as compared to all other markets. This attracts greater number of investors. Sometimes, the investment amount can be as low as $300 USD. However, the investment amount is dependent on the leverage offered by the Forex brokers. A lower investment amount opens the Forex market to small investors. Investors who want to make a small beginning to test the waters use mini Forex accounts. Lower investment amount also reduces risk.

Low transaction:
Transaction costs in the Forex market are also relatively low. Brokers do not take commissions for trading. Traders only have to bear the cost required in spread. In the Forex market, spread signifies the difference in cost between the price at which the currency was bought and the price at which it was sold. Traders can even experience spreads as low as a 1 pip.

Leverage:
The Forex market offers very high leverage. Leverage lets the trader to trade with greater amounts while having a smaller investment in the account. Forex brokers at times offer leverage as high as 400:1. Traders get a 0.25 percent in margin for their total investment.

Advantages of Forex market

Trading in the Forex market is conducted over the internet. All a trader needs to enter the Forex market is a computer and internet connectivity. This allows them to trade at any convenient time. There are automated trading platforms also that take away the pain to watch the market round-the-clock.

If the trader is constantly travelling, he/she can still keep trading by using the computer or mobile phones and PDAs. Hence, trading in the Forex market is possible anywhere and anytime.