“How to” Start Forex Market Trading? (part 3)

10 REASONS TO START TRADING FOREX!

More and more knowledgeable investors and entrepreneurs are diversifying their traditional investments. Examples such as stocks, bonds & commodities with foreign currencies for the following reasons:

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

With a daily trading volume of more than $ 1.5 trillion, the spot FOREX market can absorb the size of trade that understates the capacity of other markets. In fact, when compared to the daily market worth $ 50 billion for equity or the $ 30 billion futures market. The difference is clear, this gives you, and millions of other FOREX traders, liquidity and almost unlimited trading flexibility.

forex market

2) FOREX is a real 24 hour market.

The FOREX market never sleeps. Trading positions can be entered and exited anytime around the world, all the time, 5.5 days a week. There is no waiting for the opening bell as in the case of stock trading. This is a 24-hour electronic currency exchange (ONLINE) that has never been closed. This is very desirable for you if you want to trade part time, because you can choose when you want to trade: morning, afternoon or evening.

3) There is never a Bear Market on FOREX.

You can have access to unlimited currency exchange. Currency trading in “pairs” (for example, dollar USD vs. JPY (YEN) or dollar USD vs. CHF (Swiss franc). One side of each currency pair (for example, USD / CHF) keeps moving. So when you buy eyes certain money, you are actually selling another currency in a certain pair. When the market moves, one currency will increase in value compared to another. Of course, it depends on you to choose the correct currency to be long (you buy) or short (you sell).

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

You are allowed to trade foreign currencies with a high degree of leverage – up to 400 times the investment in your broker and with several other brokers.

Lot of standard currency 100,000 – US $ can be traded with a margin of 0.25%, or $ 250.

Forex mini accounts are allowed to trade with a margin of only 0.25%, meaning that only $ 25 allows you to control the position of a 10,000 unit currency.

Futures traders, who are accustomed to margin requirements are generally equal to 5-7% -8% of the contract value. Traders will soon realize that the FOREX market provides far greater leverage, and for stock traders, who have to send at least 50% margin, there is no comparison. If you are looking for efficient trading use, trade the Forex Market.

5) Price movements may be highly predictable.

Currency prices in Forex markets generally repeat in relatively predictable cycles, creating trends. The strong trend that develops in foreign currencies is a significant advantage for traders who use “technical” methods and strategies.

Unlike stocks, currencies have a tendency to develop strong trends. More than 80% of the volume is speculative and, as a result, the market often goes beyond and then corrects itself. As a technically trained trader, you can easily identify trends and new breakouts, to enter and exit positions.

6) YOU do not pay commissions or fees to trade FOREX

When you trade FOREX, through your forex broker, you can do it completely FREE for commissions and fees, regardless of the size of your account.

Forex brokers need a very low minimum amount to open a brokerage account. Only US $ 200 and they do not charge commissions or fees for trading or maintaining an account, regardless of your account balance or trading volume.

7) YOU don’t need to pay trade fees or exchange fees.

There are no ordinary fees, which are usually paid by futures and equity traders:

  • WITHOUT the cost of exchange or clearing.
  • WITHOUT NFA or SEC fees.

Because of over-the-counter (OTC) currency trading, through global electronic networks. On FOREX, what you see on your trading screen, is what you get. It allows you to make quick decisions on your trade without having to worry or be responsible for costs that can affect your profit or loss.

In the equity and commodity markets, you must pay commissions and exchange fees. The structure of the over-the-counter forex market eliminates exchange and clearing costs, which in turn lowers transaction costs.

8) HOW do Forex brokers make money if they don’t charge a commission?

Like all financial products traded, over-the-counter currency trading involves bid / ask spreads. This represents your partner who is willing to trade. Your broker will receive part of the bid / ask spread.

Because the currency market offers liquidity all the time, you receive tight and competitive spreads, both day and night. Stock traders can be more vulnerable to liquidity risk and usually receive wider spreads, especially during trading after working hours.

9) Market Transparency.

Market transparency is highly desirable in any trading environment. The greater the market transparency, the more efficient the market is. Unlike the FOREX market, the FOREX market is very transparent (eg, Analyzing countries, and has access to real-time research / news, easier than analyzing companies).

Because of this transparency, as an Forex trader, you will be able to implement risk management strategies in accordance with your fundamental and technical indicators.

10) Instant Command Execution

The FX market offers the highest level of financial market markets. Therefore, order execution and confirmation of filling usually occur in only 1-2 seconds.

In Forex, orders to be executed are all electronic and because you will trade through an Internet-based platform, instant execution is routine.

There are no exchanges, no traditional open stores, no floor brokers, and as a result, there are no delays. (Continued)

 

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