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By Martin Maier
10 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 because of the following
reasons:
1) FOREX is the largest financial market in the world.
With a daily trading volume of over $1.5 trillion, the spot
FOREX market can absorb trading sizes that dwarf the capacity
of any other market. In fact, when compared with the $50
billion daily market for equities or the $30 billion futures
market, it becomes quickly apparent this gives you, and
millions of other FOREX traders, almost infinite trading
liquidity and flexibility.
2) FOREX is a True 24-hour market.
The FOREX Market never sleeps. Trading positions can be
entered and exited at any moment around the globe, around the
clock, 5.5 days a week. There is no waiting for an opening
bell
as in the case of trading stocks. It is a 24- hour, continuous
electronic (ONLINE) currency exchange that never closes. This
is very desirable for you if you want to trade on a part-time
basis, because you can choose when you want to trade: morning,
noon or night.
3) There is never a Bear Market in FOREX.
You can have access to a seamless exchange of currencies.
Currencies trade in "pairs" (for example, US dollar vs. JPY
(YEN) or US dollar vs. CHF (Swiss franc), one side of every
currency pair (for example, USD/CHF) is constantly moving in
relation to the other. Thus, when you buy a particular
currency, you are actually simultaneously selling the other
currency in that particular pair. As the market moves, one of
the currencies will increase in value versus the other. Of
course, it is up to you to choose the correct currency to be
long ( you bought) or short( you sold).
4) High Leverage - up to 400:1 Leverage.
You are permitted to trade foreign currencies on a highly
leveraged basis - up to 400 times your investment with Fenix
Capital Management, LLC and with some other brokers.
Standard 100,000- US$ currency lots can be traded with as
little as 0.25% margin, or $250.
Mini FX accounts are permitted to trade with just 0.25%
margin,
meaning, just $25 allows you to control a 10,000-unit currency
position.
Futures traders, who are accustomed to margin requirements
generally equal to 5-7%-8% of the contract value, will
immediately recognize that the FOREX market provides much
greater leverage, and for stock traders, who must post at
least
50% margin, there’s no comparison. If you’re looking for an
efficient use of trading , trade the Forex Market.
5) Price Movements might be Highly Predictable.
Currency prices in the FX market generally repeat themselves
in
relatively predictable cycles, creating trends. The strong
trends that foreign currencies develop are a significant
advantage for traders who use the "technical" methods and
strategies.
Unlike stocks, currencies have the tendency to develop strong
trends. Over 80% of volume is speculative in nature and, as a
result, the market frequently overshoots and then corrects
itself. As a technically-trained trader, you can easily
identify new trends and breakouts, to enter and exit
positions.
6) YOU don't pay commissions or fees to trade FOREX
When you trade FOREX, through Fenix Capital Management LLC
(FCM) you can do it totally FREE of commissions and fees ,
regardless of your account size.
Fenix Capital Management LLC, requires a very low minimum
amount to open a brokerage account, only US$ 200 and they do
not charge commissions or fees to trade or to maintain an
account, regardless of your account balance or trading volume.
7) YOU don't have to pay trading fees or exchange fees.
There are none of the usual fees, which futures and equity
traders are accustomed to pay:
NO exchange or clearing fees,
NO NFA or SEC fees.
Because currencies trade over-the-counter (OTC), via a global
electronic network, in FOREX, what you see on your trading
screen, is what you get, allowing you to make quick decisions
on your trades without having to worry or account for fees
that
may affect your profit/loss or slippage.
In the equity and commodity markets, you must pay both 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.
8) HOW to Forex brokers make money if they don't charge
commissions?
Like all traded financial products, over-the-counter currency
trading involves a bid/ask spread, which represents the prices
at which your counterpart is willing to trade. Your broker
will
receive a part 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 vulnerable to liquidity risk
and typically receive wider trading spreads, especially during
after-hours trading.
9) Market Transparency.
Market transparency is highly desired in any trading
environment. The greater the market transparency, the more
efficient the market becomes. Unlike other markets where
transparency is compromised (like in the many recent
scandals),
FOREX markets are highly transparent (i.e., analyzing
countries,
and having access to real-time research / news, is easier than
analyzing companies).
Because of this transparency, as an FX trader, you will be
able
to apply risk management strategies in accordance to your
fundamental and technical indicators.
10) Instantaneous Order Execution
The FX market offers the highest level of market transparency
out of all the financial markets. Because of this, order
execution and fill confirmation usually occur in just 1-2
seconds.
In Forex, order execution is all-electronic and because you'll
be trading via an Internet-based platform, instantaneous
execution is routine.
There are no exchanges, no traditional open-outcry pits, no
floor brokers, and consequently, no delays.( will be continued
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About The Author: Veteran Trader Martin Maier is the Founder
of
Fenix Capital Management, LLC,
www.fenixcapitalmanagement.com. He is the developer of
various futures and commodities trading programs and his
systems have been ranked and rated by various large American
Investment Profile Rating Companies such as STAR and MAR.
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