How To Start Trading The Forex Market? (part 3)

Posted on February 9, 2010
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ten REASONS TO START TRADING FOREX!

More and more well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency as a result of of the subsequent reasons:

1) FOREX is the biggest financial market in the world.

With a daily trading volume of over $1.5 trillion, the spot FOREX market will absorb trading sizes that dwarf the capability of any other market. After all, compared with the $fifty billion daily market for equities or the $thirty billion futures market, it becomes quickly apparent this gives you, and various other FOREX traders, virtually infinite trading liquidity and flexibility.

a pair of) FOREX could be a True 24-hour market.

The FOREX Market never sleeps.  Trading positions can be entered and exited at any moment around the world, round the clock, 5.five days a week. There is no looking forward to an gap bell as within the case of trading stocks. It is a 24- hour, continuous electronic (ONLINE) currency exchange that never closes. This can be very fascinating for you if you wish to trade on a half-time basis, as a result of you can opt for when you wish to trade: morning, noon or night.

3) There is never a Bear Market in FOREX.

You’ll be able to have access to a seamless exchange of currencies. Currencies trade in “pairs” (for instance, US greenback vs. JPY (YEN) or US dollar vs. CHF (Swiss franc), one side of each currency try (as an example, USD/CHF) is constantly moving in relation to the other. So, when you purchase a explicit currency, you are truly simultaneously selling the other currency in that particular pair. As the market moves, one in every of the currencies will increase in value versus the other. After all, it is up to you to choose the right currency to be long ( you acquire) or short( you sold).

4) High Leverage – up to 400:1 Leverage.

You’re permitted to trade foreign currencies on a highly leveraged basis – up to 400 times your investment with Fenix Capital Management, LLC and with some other brokers.

Commonplace 100,000- US$ currency tons will be traded with as very little as 0.25% margin, or $250.

Mini FX accounts are permitted to trade with simply 0.25% margin, meaning, simply $twenty five allows you to control a 10,000-unit currency position.

Futures traders, who are accustomed to margin requirements generally equal to five-7%-8% of the contract price, can immediately acknowledge {that the} FOREX market provides abundant greater leverage, and for stock traders, who must post at least fifty% margin, there’s no comparison. If you’re trying for an economical use of trading , trade the Forex Market.

5) Price Movements may be Highly Predictable.

Currency costs within the FX market generally repeat themselves in relatively predictable cycles, creating trends. The sturdy trends that foreign currencies develop are a important advantage for traders who use the “technical” strategies and strategies.

Unlike stocks, currencies have the tendency to develop sturdy trends. Over 80% of volume is speculative in nature and, so, the market frequently overshoots and then corrects itself. As a technically-trained trader, you can easily identify new trends and breakouts, to enter and exit positions.

six) YOU don’t pay commissions or fees to trade FOREX

Once you trade FOREX, through Fenix Capital Management LLC (FCM) you’ll be able to do it totally FREE of commissions and costs , no matter your account size.

Fenix Capital Management LLC, requires a terribly low minimum quantity to open a brokerage account, solely US$ two hundred and they do not charge commissions or fees to trade or to keep up an account, irrespective of your account balance or trading volume.

seven) YOU don’t need to pay trading fees or exchange fees.

There are none of the same old fees, that futures and equity traders are conversant in pay:

NO exchange or clearing fees,
NO NFA or SEC fees.

As a result of currencies trade over-the-counter (OTC), via a global electronic network, in FOREX, what you see on your trading screen, is what you get, permitting you to create quick selections on your trades while not having to fret or account for fees which will have an effect on your profit/loss or slippage.

Within the equity and commodity markets, you need to pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, that in flip lowers transaction costs.

8) HOW to Forex brokers build money if they don’t charge commissions?

Like all traded money products, over-the-counter currency trading involves a bid/raise unfold, which represents the prices at which your counterpart is willing to trade. Your broker can receive a part of this bid/raise spread.

As a result of the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders will be more liable to liquidity risk and sometimes receive wider trading spreads, particularly during after-hours trading.

nine) Market Transparency.

Market transparency is highly desired in any trading environment. The larger the market transparency, the additional economical the market becomes. Unlike different markets where transparency is compromised (like in the numerous recent scandals), FOREX markets are highly transparent (i.e., analyzing countries, and getting at real-time analysis / news, is simpler than analyzing firms).

As a result of of this transparency, as an FX trader, you may be ready to use risk management methods in accordance to your basic and technical indicators.

10) Instantaneous Order Execution

The FX market offers the very best level of market transparency out of all the monetary markets. As a result of of this, order execution and fill confirmation sometimes occur in just 1-2 seconds.

In Forex, order execution is all-electronic and as a result of you will be trading via an Net-primarily based platform, instantaneous execution is routine.

There aren’t any exchanges, no traditional open-outcry pits, no floor brokers, and consequently, no delays.( can be continued )

To learn how to find the best online stock brokers, visit this site: online stock broker. Also you will find some tips on what to consider when comparing online stock broker. Get your online stock broker guide today!

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