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How To Start Trading The Forex Market? (part 3)
By plrprousers | February 8, 2010
10 REASONS TO START TRADING FOREX!
Additional 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 following reasons:
1) FOREX is the largest financial market within the world.
With a daily trading volume of over $1.5 trillion, the spot FOREX market will absorb trading sizes that dwarf the capacity of any other market. After all, when put next with the $fifty billion daily marketplace for equities or the $30 billion futures market, it becomes quickly apparent this offers you, and uncountable alternative FOREX traders, virtually infinite trading liquidity and flexibility.
a pair of) FOREX could be a True twenty four-hour market.
The FOREX Market never sleeps. Trading positions can be entered and exited at any moment around the globe, around the clock, 5.five days a week. There is no waiting for an gap bell as within the case of trading stocks. It is a twenty four- hour, continuous electronic (ONLINE) currency exchange that never closes. This is very desirable for you if you would like to trade on a half-time basis, as a result of you’ll choose when you would like to trade: morning, noon or night.
three) There is never a Bear Market in FOREX.
You’ll have access to a seamless exchange of currencies. Currencies trade in “pairs” (for example, US dollar vs. JPY (YEN) or US dollar vs. CHF (Swiss franc), one facet of each currency pair (for example, USD/CHF) is constantly moving in relation to the other. Therefore, when you get a particular currency, you’re really simultaneously selling the opposite currency in that exact pair. Because the market moves, one in all the currencies will increase in price versus the other. Of course, it’s up to you to choose the right currency to be long ( to procure) or short( you sold).
four) High Leverage – up to four hundred:1 Leverage.
You’re permitted to trade foreign currencies on a highly leveraged basis – up to four hundred times your investment with Fenix Capital Management, LLC and with some other brokers.
Standard 100,000- US$ currency lots can be traded with as very little as 0.25% margin, or $250.
Mini FX accounts are permitted to trade with just 0.twenty five% margin, which means, simply $twenty five permits you to manage a ten,000-unit currency position.
Futures traders, who are accustomed to margin necessities usually equal to 5-7%-8% of the contract price, will immediately acknowledge {that the} FOREX market provides much larger leverage, and for stock traders, who should post a minimum of 50% margin, there’s no comparison. If you’re trying for an economical use of trading , trade the Forex Market.
five) Worth Movements might be Highly Predictable.
Currency prices in the FX market generally repeat themselves in comparatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the “technical” strategies and strategies.
Not like stocks, currencies have the tendency to develop robust trends. Over eighty% of volume is speculative in nature and, thence, the market frequently overshoots and then corrects itself. As a technically-trained trader, you’ll be able to simply identify new trends and breakouts, to enter and exit positions.
6) YOU do not pay commissions or fees to trade FOREX
After you trade FOREX, through Fenix Capital Management LLC (FCM) you can do it totally FREE of commissions and costs , irrespective of your account size.
Fenix Capital Management LLC, requires a very low minimum quantity to open a brokerage account, solely US$ 200 and they are doing not charge commissions or fees to trade or to take care of an account, irrespective of your account balance or trading volume.
7) YOU do not should pay trading fees or exchange fees.
There are none of the standard fees, that futures and equity traders are aware of pay:
NO exchange or clearing fees,
NO NFA or SEC fees.
As a result of currencies trade over-the-counter (OTC), via a world electronic network, in FOREX, what you see on your trading screen, is what you get, permitting you to create quick choices on your trades while not having to worry or account for fees that will affect your profit/loss or slippage.
Within the equity and commodity markets, you need to pay each a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.
eight) HOW to Forex brokers make money if they do not charge commissions?
Like all traded money product, over-the-counter currency trading involves a bid/ask spread, which represents the costs at which your counterpart is willing to trade. Your broker can receive a half of this bid/ask spread.
Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders can be more liable to liquidity risk and sometimes receive wider trading spreads, particularly during when-hours trading.
9) Market Transparency.
Market transparency is very desired in any trading environment. The bigger the market transparency, the a lot of economical the market becomes. Unlike other markets where transparency is compromised (like in the numerous recent scandals), FOREX markets are highly transparent (i.e., analyzing countries, and accessing real-time analysis / news, is less complicated than analyzing corporations).
As a result of of this transparency, as an FX trader, you’ll be in a position to apply risk management ways in accordance to your basic and technical indicators.
10) Instantaneous Order Execution
The FX market offers the highest level of market transparency out of all the money 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 because you’ll be trading via an Internet-based mostly platform, instantaneous execution is routine.
There aren’t any exchanges, no ancient open-outcry pits, no floor brokers, and consequently, no delays.( can be continued )
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