What Is Forex Market?

The foreign exchange market is where currencies are traded. Currencies are important because they allow us to buy goods and services locally and internationally. To engage in foreign trade and commercial activities, foreign currency must be exchanged.

Forex market has been around for centuries. 

Forex trading was initially difficult for individual investors to trade, before the widespread availability of the Internet. And now thanks to the internet, most individuals can now access the exchange market directly through banks or brokers. Individual traders can even control huge trades with small account balances because most online brokers and dealers offer high leverage with different forex market types. 

Many individuals have found massive success via trading forex, but for beginners, we recommend you don’t rush into forex trading without a basic understanding first!

Let’s discover the pros and cons of forex trading to prepare you for the exciting trading journey!

Pros of forex trading

1. Potential for quick returns

The liquidity is high and the foreign currency market is always shifting quickly. This allows traders to have the potential for quick returns when paired up with high leverage like 1:400 maximum leverage on VC Plus. 

The forex market may produce faster returns than other markets such as the stock market because traders may have to wait longer for an increase in asset values to push the stock price. This benefits traders of the forex market since it lowers the opportunity cost for traders by moving quickly.

2. Easy to start

Traders can set up a Forex account on the internet and within a few clicks to start trading. Most brokers offer online trading like VC Plus provides a true one-stop web platform that includes advanced chart features for you to start trading forex.

3. Leverage for higher returns

Leveraging your trades can be the difference between a modest and a huge profit. In comparison to most other markets, the foreign exchange market has a higher supply of leveraged resources. Such as the 1:400 maximum leverage on VC Plus which allows you to start with small capital and still end up with higher profits.

4. 24 hours market

Forex market opens 24 hours a day on weekdays but closed on weekends. It opens at 5 pm on Sunday New York City local time and closes at 5 pm on Friday. And trading resumes again after 48 hours to start a new week.

This means you are not restricted to trading within a certain hour on weekdays like the stock market, and you can schedule your time to trade according to your liking. 

Cons of forex trading

1. Volatility

All markets, including the foreign currency market, are prone to volatility. The unanticipated severe volatility will affect your trading plan especially if you’re a  short-term forex trader. 

2. Messy regulations

The foreign exchange market does not always have strict regulatory monitoring and transactions are not always carried out on organised exchanges. As a result, before opening an account, traders need to conduct a throughout check on their broker's reputation, regulations, and license.

Always check their license and regulation before trading.

VC Plus is a true one-stop web-based platform, regulated by FINTRAC

3. High leverage = high risk

Yes, we all know that high leverage provides you with a higher return, but it’s the same as putting you at higher risk if you don't know what you’re doing. Factors that will reduce your risk in trading forex include an understanding of leverage, a trading plan, a capital allocation strategy, and good emotional control. 

Joining free online classes will also help you to gain more forex knowledge and boost your confidence in trading.

VC Plus has weekly free forex classes led by experienced forex traders on MQ Demy

Visit MQ Demy

How to Start Trading Forex

1. Understanding the basics

Although not difficult, Forex trading is a unique skill that requires specific understanding. For example, the drivers of currency price movements are different from the stock market, and foreign exchange trading is more leveraged than stocks.

You can follow our VC Plus i3investor as we have frequent educational blogs about forex trading. 

VC Plus i3investor

2. Set up an account

You will need a forex trading account for forex trading. Open an account with VC Plus today and grab a guaranteed USD100$ Welcome Bonus (T&C apply)

Open a trading account with VC Plus 

USD100$ Welcome Bonus Info

3. Practice with virtual accounts.

For beginner traders, you can use a virtual account to practice your trades in VC Plus. A virtual account will provide fake capital for you to practice your trade safety without actually using your real money.

4. Have a trading plan

While the timing and market forecasts are not always achievable, developing a trading plan is still important to help you stay on track with your trading journey.

It will help you to focus on your trading objectives, and help you to trade with discipline. You should be able to trade regularly, control your emotions, and even refine your trading approach with the assistance of a trading plan.

5. Learn from free Forex classes

There are many free forex classes and videos available on the internet that can help you to gain more forex knowledge. 

VC Plus also has weekly free forex classes led by experienced forex traders. Join the live streams to learn forex trading from the experts! 

Visit MQ Demy

Start your trading journey with VC Plus today.

And grab your guaranteed USD100$ Welcome Bonus!

Open a trading account with VC Plus

USD100$ Welcome Bonus Info

VC Plus is a web-based trading platform, built for passionate traders. It’s a true one-stop web platform that is trusted worldwide.