The profit of Trading the Forex Market

The profit of Trading the Forex Market
Historically, the FX market was accessible most to major banks, international corporations and other participants who traded in big transaction sizes and volumes. Small-scale traders counting individuals like you and I, had little access to this market for such a long time. Now with the beginning of the Internet and technology, FX trading is fetching an increasingly fashionable investment alternative for the public.

The benefits of trading the currency market:

FX market is open 24-hours and it closes only on the weekends;
It is liquid and efficient;
It is very volatile;
It has very low transaction costs;
You can use a high level of leverage (borrowed money) with ease; and
You can profit from a bull or a bear market.
Nonstop, 24-Hour Trading
In FX market, the currency exchange is a 24-hour market. Any trader can decide to trade after you come home from work. Regardless of what period a trader wants to trade at whatever time of the day, there would be sufficient buyers and sellers to take the opposite side of your trade. These features of the market give the traders enough elasticity to manage their trading around their daily routine.

Liquidity and Efficiency

When there are many buyers and many sellers, you can anticipate buying or selling at a price that is extremely close to the last market price. The currency market is the liquid market in the world. Trading volume in the currency markets can be between 50 and 100 times larger than the New York Stock Exchange.
When you trade stocks, you may have experienced actions where one piece of news accelerates or decelerates the price of the fundamental stock you may have bought. Perhaps the shareholders of a company have kicked out a director or the company has just unrestricted a new product and big investors are buying the shares of a meticulous company. Share prices are affected by the proceedings or inactions of one or a few individuals. Therefore, if you are relying on television reports and newspapers to get your news, most of the opportunities or warnings will have come too late for you to take advantage by the time you get them.
So many factors and so many participants that the likelihood of any one individual or group of individuals drastically affecting the value of a currency is minute on the other hand affect the value of currencies. Because of its sheer size, the currency market is hard to manipulate. The capability for people to engage in 'insider trading' is virtually eliminated. As an average trader, you are less disadvantaged. You are likely to be playing on relatively equal ground along with all the other traders and investors whom you are competing.

Note about price gaps:

For those traders who have already traded other markets, they probably know about price 'gaps'. 'Gaps' take place when prices 'jump' from one price level to another without having taken any incremental steps to get there. For example, you may be trading a share that closes at $10 at the end of today but due to some event that happens overnight; it opens tomorrow at $5 and continues to go downwards for the rest of the day.
Gaps bring about another degree of uncertainty that may meddle with a trader's strategy. Probably one of the most worrying aspects of this is when a trader uses stop-losses. In this case, if a trader puts a stop-loss at $7 because he no longer wants to be in a trade if the share price hits $7, his trade will remain open overnight and the trader wakes up tomorrow with a loss bigger than he may have been prepared for.

Volatility

Trading opportunities exist when prices fluctuate. If you purchase a share for $2 and it stays there, there is no chance to make a profit. The scale of level of this variation and its regularity is referred to as volatility. As a trader, you profit from volatility. Large volume transactions and high liquidity joint with fewer trading instruments make greater intra-day volatility in the currency market that can be exploited by day-traders. The high instability of the currency market indicate that a trader can potentially earn 5 times more money from currency trading than trading the most liquid shares.