Why are investors turning to Forex Trading?

Malta, much like many other countries in the world, has seen a surge in forex trading over the past few years. This is due to multiple reasons, such as forex becoming more accessible and easier to understand, as well as investors looking to expand their portfolios. 

Forex has left the realm of being something that only money and investing experts get involved in, and is now an investment pie that everyone wants a slice of. Here are some of the reasons why investors are turning to forex. ​​

Budget-friendly 

Unlike many other investment opportunities, FX trading is actually quite budget-friendly. While profits will clearly vary depending on how much or how little you invest, you can invest with a small amount of money and still see returns. 

This means that new investors, or people looking to dip their toe into forex, can do so without breaking the bank and without risking too much. 

Currency choice

Depending on the platform you use, you will often be able to choose from dozens of currencies and currency pairs to invest in. While the bigger currencies such as the dollar and pound are the most popular, you can also choose currencies from emerging markets. 

The krona, rupee, Kuwait dinar, and Omani rial are only a few of the strong emerging market currencies that you can invest in. This is another reason why Maltese investors love forex, as they are often looking for opportunities outside of the euro. 

Multiple trading strategies

Another reason why forex is so popular in Malta is due to the multiple trading strategies on offer. Unlike stocks, where you buy, wait for a profit, and then sell, forex gives you more control over your investment.

Scalping

Scalping is a popular but work-heavy trading strategy. Profits in forex are made when the currency you bought becomes stronger than the one you used to buy it. These movements can be very small, and scalping takes advantage of that. Scalp traders sell when they see a tiny increase, but they do it often, which leads to large gains in the long term. 

Day trading

Day trading is precisely what you think it is. Day trading involves opening your position in the morning and then waiting a few hours, or the entire day, to close it. Day trading is difficult to get right as it is more unpredictable and often involves more money, but it is popular, nevertheless. 

Position trading

Position trading is the most popular strategy amongst average investors. It involves leaving your position open for a few weeks or months and hoping for larger gains. Considering that strong currencies tend to trend upward, it’s often the case that the longer you wait, the bigger your profits. 

24-hour trading

One huge benefit of trading forex is that the markets never close. With something like stocks, you have to wait for the bells to ring and the floors to open if you want to do anything, but forex never sleeps, and you can trade whenever you want. 

Impossible to corner the market 

A lot of investors are often wary of, or completely turned off by, the idea of a few whales having a majority share of a particular investment. This is because those whales essentially control the market and can therefore control whether you lose or make money. 

However, it is nearly impossible to be a whale in the world of forex because there is far too much liquidity in the system. While there can be an entity that can influence prices and the market, it will only be for a very short time, and the market will quickly correct itself. 

Leverage

In the world of forex, leverage is king. In simple terms, leverage is the ability to invest 5, 10, or 20 times more money than you have, therefore increasing your potential profits. 

If you have $10 to invest and your broker allows for 10x leverage, you can then invest $100 into forex. Considering forex profits are often very tiny per trade, being able to 10x your investment will allow for 10x profits; this makes leverage brilliant for those with smaller investment budgets. 

Disclaimer | This content should not be interpreted as investment advice. The opinions expressed within are solely the author’s and do not reflect the opinions of the publishers.