"How To" Begin Trading In The Forex Market? (part 3)
For the following reasons, more and more informed investors and entrepreneurs are diversifying their traditional investments such as stocks, bonds, and commodities with foreign currency:
10 REASONS TO BEGIN FOREX TRADING!
Because of the following reasons, an increasing number of informed investors and entrepreneurs are diversifying their traditional investments such as stocks, bonds, and commodities with foreign currency:
1) FOREX is the world's largest financial market.
The spot FOREX market can absorb transaction sizes that surpass the capacity of any other market, with a daily trading volume of over $1.5 trillion.
In fact, whether compared to the $50 billion daily equities market or the $30 billion futures market, it is clear that this provides you and millions of other FOREX traders with nearly endless trading liquidity and flexibility.
2) The FOREX market is open 24 hours a day, 7 days a week.
The FOREX Market is never quiet. Trading positions can be entered and exited at any time, anywhere in the world, 5.5 days a week. There is no need to wait for the opening bell, as there is when trading equities.
It is a continuous electronic (ONLINE) currency exchange that operates 24 hours a day, seven days a week.
This is particularly appealing if you wish to trade part-time because you can trade whenever you want: morning, noon, or night.
3) There is no such thing as a bear market in FOREX.
You can swap money without difficulty. Currencies are traded in "pairs" (for example, the US dollar vs.
JPY (YEN) or the US dollar vs. CHF (Swiss franc), with one side of each currency pair (for example, USD/CHF) continually fluctuating in reference to the other. As a result, when you buy one currency, you are concurrently selling the other currency in that pair.
As the market moves, one of the currencies will gain value relative to the other. Of course, you must decide whether to be long (you bought) or short (you sold) ( you sold).
4) High Leverage (up to 400:1)
You can trade foreign currencies with Fenix Capital Management, LLC and several other brokers on a highly leveraged basis, up to 400 times your investment.
Currency lots of 100,000 US dollars can be exchanged with as low as 0.25% margin, or $250.
Mini FX accounts can trade with a 0.25% margin, which means that you can own a 10,000-unit currency position for just $25.
Futures traders, who are used to margin requirements of 5-7%-8% of the contract value, will instantly understand that the FOREX market allows far larger leverage, and there is no comparison for stock traders, who must post at least 50% margin.
Trade the Forex market if you want to make the most of your trading time.
5) Price changes may be quite predictable.
Currency prices in the FX market tend to reoccur in somewhat predictable cycles, resulting in trends. Foreign currency traders that employ "technical" methods and tactics benefit greatly from the strong trends that develop.
Unlike equities, currencies are prone to developing strong trends. Because more than 80% of trade is speculative in nature, the market routinely overshoots and then corrects itself.
You can readily recognize new trends and breakouts as a technically skilled trader, allowing you to initiate and exit positions.
6) You do not have to pay any commissions or fees to trade FOREX.
Trading FOREX with Fenix Capital Management LLC (FCM) is completely free of commissions and costs, regardless of account size.
Fenix Capital Management LLC takes only US$ 200 to open a brokerage account and does not charge commissions or fees to trade or maintain an account, regardless of account balance or trading volume.
7) You are not required to pay any trading or exchange fees.
There are no typical fees that futures and stock traders are used to paying:
There are no exchange or clearing fees, and no NFA or SEC fees.
Because currencies trade over-the-counter (OTC) across a global electronic network, what you see on your trading screen is what you get in FOREX, allowing you to make quick decisions on your trades without having to worry about or account for fees that may effect your profit/loss or slippage.
You must pay both a commission and exchange fees in the equity and commodity markets. The FX market's over-the-counter structure eliminates exchange and clearing fees, lowering transaction costs.
8) How do Forex brokers make money if commissions are not charged?
Over-the-counter currency trading, like other traded financial items, entails a bid/ask spread, which shows the prices at which your counterpart is willing to deal.
Your broker will be paid a portion of the bid/ask spread.
Because the currency market is open 24 hours a day, you can get tight, competitive spreads both during the day and at night.
Stock traders are more susceptible to liquidity risk and often enjoy greater trading margins, particularly after-hours trading.
9) Transparency in the market.
In every trading situation, market transparency is widely desired.
The more transparent the market, the more efficient the market.
Unlike other markets where transparency has been eroded (as in the several recent scandals), FOREX markets are very transparent (studying countries and having access to real-time research / news is easier than analyzing firms).
Because of this transparency, you will be able to implement risk management strategies in accordance with your fundamental and technical indications as an FX trader.
10) Order Execution in an Instant
Out of all financial markets, the FX market has the highest amount of market transparency. As a result, order execution and fill confirmation often take only 1-2 seconds.
Order execution in Forex is entirely electronic, and because you'll be trading via an Internet-based platform, immediate execution is common.
There are no exchanges, traditional open-outcry pits, floor brokers, or delays as a result.
(to be continued)
