ArticlesReader.com Menu
Newest Articles
Most Viewed Articles
ArticlesReader.com RSS
Submit Article
Login
Signup
Search the articles

Articles Main Categories
Advice
Animals
Automobiles
Business
Career
Communications
Computer Programming
Computers
Entertainment
Environment
Family
Fashion
Finance
Food
Health & Medical
Home & Garden
Humor
Internet Business
Internet Marketing
Legal
Leisure & Recreation
Marketing
Other
Politics
Reference & Education
Religion
Self Improvement
Sports
Technology & Science
Travel
Writing
Subscribe
Receive alert message from us when new articles submitted to our site for free.

Enter your name

Enter your email

Syndicate

















Related Products
Home::Currency Trading

Forex: Benefits of Trading the Forex Market.

Author : Raul Lopez
Trading the Forex market has become very popular in the last years. Why is it that traders around the world see the Forex market as an investment opportunity? We will try to answer this question in this article. Also we will discuss come differences between the Forex market, the stocks market and the futures market.



Some of the benefits of trading the Forex market are:



Superior liquidity

Liquidity is what really makes the Forex market different from other markets. The Forex market is by far the most liquid financial market in the world with nearly 2 trillion dollars traded everyday. This ensures price stability and better trade execution. Allowing traders to open and close transactions with ease. Also such a tremendous volume makes it hard to manipulate the market in an extended manner.



24hr Market

This one is also one of the greatest advantages of trading Forex. It is an around the click market, the market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes on Friday at 5:00 pm EST when San Francisco terminates operations. There are transactions in practically every time zone, allowing active traders to choose at what time to trade.

Leverage trading



Trading the Forex Market offers a greater buying power than many other markets. Some Forex brokers offer leverage up to 400:1, allowing traders to have only 0.25% in margin of the total investment. For instance, a trader using 100:1 means that to have a US$100,000 position, only US$1,000 are needed on margin to be able to open that position.



Low Transaction costs

Almost all brokers offer commission free trading. The only cost traders incur in any transaction is the spread (difference between the buy and sell price of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency pair) in some pairs.



Low minimum investment

The Forex market requires less capital to start trading than any other markets. The initial investment could go as low as $300 USD, depending on leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level.



Specialized trading

The liquidity of the market allows us to focus on just a few instruments (or currency pairs) as our main investments (85% of all trading transactions are made on the seven major currencies). Allowing us to monitor, and at the end get to know each instrument better.



Trading from anywhere

If you do a lot of traveling, you can trade from anywhere in the world just having an internet connection.



Some of the most important differences between the Forex market and other markets are explained below.



Forex market vs. Equity markets



Liquidity

FX market: Near two trillion dollars of daily volume.

Equity market: Around 200 billion on a daily basis.



Trading hours

FX market: 24hr market, 5.5 days a week

Equity market: Monday through Friday from 8:30 EST to 5:00 EST



Profit potential

FX market: In both, rising and falling markets.

Equity market: Most traders/investor profit only from rising markets.



Transaction costs

FX market: Commission free and tight spreads.

Equity market: High Commissions and transaction fees.



Buying power

FX market: Leverage up to 400:1

Equity market: Leverage from 2:1 to 4:1



Specialization

FX market: most volume (85%) is made on major currencies (USD, EUR, JPY, GBP, CHF, CAD and AUD)

Equity market: More than 40,000 stocks to choose from



Forex market vs. Futures market



Liquidity

FX Market: Near two trillion dollars of daily volume.

Futures market: Around 400 billion dollars on a daily basis.



Transaction costs

FX market: Commission free and tight spreads.

Futures market: High commissions fees.



Margin

FX market: Fixed rate of margin on every position.

Futures market: Different levels of margin on overnight positions than day time positions.



Trade execution

FX market: Instantaneous execution.

Futures market: Inconsistent execution.



All this makes the Forex market very attractive to investors and traders. But I need to make something clear, although the benefits of trading the Forex market are notorious; it is still difficult to make a successful career trading the Forex market. It requires a lot of education, discipline, commitment and patience, as any other market.


Article Source: http://www.articledashboard.com





Raul Lopez is a full time Forex trader and founder of www.straightforex.com a high quality Forex training and Forex trading course provider.





Spam emails More free articles

Related articles


  1. Is The U.S. Dollar About To Reverse Course?
  2. Why Demo Account Performance Is Often Better Than Real Account Performance
  3. Factors Influencing a Currency Pair Exchange Rate
  4. Financial Crises, Global Capital Flows and the International Financial Architecture
  5. FOREX 101: Make Money with Currency Trading
  6. Online Forex
  7. Investors - What Separates the Good Traders from the Bad Traders?
  8. Assessing the Opportunities Presented by the New Iraqi Currency
  9. Choosing A Forex Broker
  10. Forex Signal, Forex Signals Advice
  11. Why Forex Traders Plan To Fail Before They Even Place Their First Trade & How You Can Know It & ...
  12. The Secrets of the Super-Traders
  13. Internet and Computer Systems in the FOREX Business
  14. How To Handle A String Of Losses
  15. 5 Questions You Need To Have Answered Before You Back-Test Your Forex System
  16. How Not to Lose Your Shirt Trading Forex
  17. Impress Your Date with Forex Trading Lingo
  18. Forex: Why Psychiatrists Make Better Traders Than Expert Economists?
  19. Are you prepared to currency trade?
  20. Forex Trading Education: Things You Should Know About Forex Trading
  21. Currency Trading: Understanding the Basics of Currency Trading
  22. “How To” Start Trading The Forex Market? (part 3)
  23. Forex Trade: Main Drawbacks of a Forex Trader
  24. What's The Fuzz About E-Currency Trading
  25. Forex: Benefits of Trading the Forex Market.
More related feeds
More newbie info about FOREX trading PART 2
When you want to start trading the Forex Market nobody is asking you for a diploma, a formal license or a proof of how many hours you have spent studying the Foreign Exchange Market and/or Banking Industry. FOREX Trading is Economical ...

the wonderful benefits - discover 2 little known indicators to ...
An ECN-like service outline the forex market for its biggest benefits the individual forex trader a bucket shop broker trading big, long-lasting trends we need to make about FX Trading strategies which are successful is they are all ...

3 Reasons to Invest in Forex Automated Trading Software
The great thing about forex automated trading software is that it is constantly analyzing the market for you and making predictions around the clock so that you will constantly be on the winning end of a trade. ...

Forex Robot Software Equals Growing Capital
Incredibly, $3 trillion dollars are invested daily in the forex market. Forex trading differs from the stock market in that investors must bid on scale and there are greater differences in the lower investment rankings. ...

The Benefits of Forex Trading
The trade cost is lower, most of the forex companies request you to pay a small commission. the bid-ask spread may be adds to the trading cost. However, also the real-time Forex data is (Free).The Forex market continue along the day (24 ...

Forex Margin Trading - Initial Tips!
Forex margin trading is simply a forex trading account which is 'leveraged'. This means effectively for every $1 you have as your deposit you have up to $100 to invest (this is the simplest definition for illustrative purposes only) ...

The Benefits of Forex Trading
Insider trading is nonexistent in Forex Trading, and with Forex Trading you don't have to worry about price gaps. You can decide when to sell or buy. Also, because of high volatility in the currency market, traders often earn five times ...

Robot Trading Forex - You Can Build It!
To some the idea of an automatic trading robot that will monitor the Forex market while you sit in your comfortable armchair sipping your ice cold beer is a thing only seen in a science fiction movie. To others it's the way they choose ...

FOREX CONQUERED
—Sandy Jadeja, Chief Market Analyst and EditorLondon Stock Exchange, London, England "Forex Conquered is a bold title, but this book delivers the tools needed for successful forex trading. There is no fluff here, just the wisdom of a ...

Benefits of Trading The Forex Market
Now with the advent of the Internet and technology, FX trading is becoming an increasingly popular investment alternative for the general public. The benefits of trading the currency market: It is open 24-hours and it closes only on the ...

 


 

© 2007 articlesreader.com - All Rights Reserved