Here are just a few reasons why, so many are choosing this market:

Forex is A 24-hour market. There is no waiting for the opening bell - from Sunday nightfall to Friday daylight EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade–morning, noon or night.

No Fees. No clearing fees, no exchange fees, no government fees, no account management fees, no redemption fees. Forex brokers are compensated for their services through something called the bid-ask spread, essentially a commission. This commission is several times less than stock exchange market commissions (read below)!

No fixed lot sizes. In the futures markets, for example the contracts are set by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you choose your own lot size.

This allows people to enter this market with accounts as low as $250.

Low transaction costs. The retail transaction cost (the bid/ask spread) is typically less than 0.1% in normal market conditions. At superior dealers, the spread could be as low as .07% (percent). This depends on your account settings and all will be explained later.

No insider trading. It is impossible to corner the market. The global foreign exchange market (Forex) is so huge and has so many participants that no specific entity (not even the Federal Reserve) can command the market charge for a significant period of time.

Leverage. In Forex trading, a small margin deposit can command a much bigger currency contract. Leverage gives the trader the ability to make those high profits, and at the same time keep exposed investment to the minimum. For example, Forex brokers recommend 200 to 1 weight, which means that a $50 cash margin deposit would allow a trader to buy or sell a $10,000 contract. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. However, margin and leverage is a double-edged sword. Without proper risk management, this high gradation of leverage can result not only in large gains but large losses as well.

High Liquidity. Because the Forex Market is so huge, it is also incredibly liquid. This means that under regular market conditions, with a click of a mouse you can instantaneously buy and sell at will. Similarly, you are never “jammed” in a trade.

Free Demo Accounts. Most online Forex brokers provide demo accounts for beginner traders to practice trading, along with streaming Forex news and charting and trading software. All free! These are very valuable resources for SMART traders who would like to polish their trading skills with ‘play’ funds before opening a real trading account and starting trading with real money.

Free Trading Software. As mentioned earlier all brokers provide you with trading and charting software, usually free of charge. The software allows you to open and close positions in real time, with a click of a mouse! You can even set your online trading platform automatically to close your position at your decided Take Profit level and/or close your trade if it is going against you (a stop loss order).

Mini and Micro Accounts. You would think that getting started as a Forex trader would cost a ton of money. The reality is, compared to trading stocks, options or futures, it does not. Online Forex offer “mini” and “micro” trading accounts, some with a minimum account deposit of $300 or less. This is not to say that you should open an account with the bare minimum but it does make Forex much more accessible to the individual traders who does not have a lot of start-up trading capital.

Despite all these advantages trading the Forex is not an easy task and should never be approached light-mindedly especially by new forex traders. The dream of great returns can quickly turn into a reality of frustration and losses if you start trading unprepared.

In our next article we will talk about best practices for beginner forex traders and will also look at two of the best forex trading tools available on the market: the Forex Killer System and the FX Tracer. Automated trading software becomes more and more popular, with certain analysts predicting over 50% of all trades to be executed by trading robots by 2010 and anyone intending to make money in Forex should seriously consider using these tools, which are becoming more and more intelligent, while at the same time dropping in price. Just a few years ago an automated trading system like the Forex-Killer or FX Tracer could cost in the order of several thousand dollars! Compare this with under $100 for either system today and not taking advantage of an automated trading system becomes almost insanity.