Forex Advice, Day Trading, Charts,
Forex Articles & Forex News
Popular Forex Articles
Forex Glossary
Here are some of the most common terms used in FOREX trading. Ask Price – Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote – e.g. EUR/USD 1.1965 / 68 – means...Read More
FOREX Trading: Risky Business
You can see the claims on some FOREX web sites, implying that FOREX is a risk-free pastime. No investment is risk-free. In FOREX you are trading substantial sums of money, and there is always a possibility that a trade will go against you. There...Read More
Spot forex Trading: Little Known Wealth Building Secret Of The Rich & Famous
If you search on the internet you'll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs. I have not done many internet income opportunities...Read More
The Miracle of Forex
My father, who owns a small parts store and garage for vintage British sports cars, called me up recently and droned on and on about how he is getting killed by the Euro. Confused as to how the Euro could possibly be affecting his small and...Read More
The Top Four Forex Brokers
This article contends that the best forex brokers are: Saxo Bank, GAIN Capital, GCI Financial Ltd., and CMS Forex. CMS Forex accepts no commission, demands a small amount of only $200 to establish a mini account, provides users with a Free Demo...Read More
E-currency Trading - An alternative to Futures & Forex Trading
E-currency Trading - An alternative to Futures & Forex Trading
by Merv Thompson
 |
|
 |
|
 |
|
 |
I find it amazing that nearly everyday I receive something online or offline that is the greatest break-through in Trading. You know the stuff. This system or that method has been thoroughly tested and back-tested in every conceivable fashion and is wildly successful. Some work for a period of time but most do not. The decades old statistical fact still remains, 90+% of Futures Traders will lose all of their trading capital within their first year of trading. Now there is a new and promising alternative.
Enter e-Currency Trading. In simple terms e-currency is Internet Money. E-Currency allows the purchase of Internet goods and services at lightning speed and most importantly with a high level of security. Much higher than credit cards, bank transfer etc. The demand for e-currency should only grow as Internet Commerce grows.
So what does this have to do with trading? There are literally hundreds of different e-currencies. Each is backed by an underlying Currency or a precious metal. The need arises to exchange between these e-currencies or convert an e-currency to hard cash. Much like the Euro is to the European Union. We can profit from the exchanging process and profit from the fluctuation of the underlying currency value.
The same basic strategies apply to e-currency trading as with futures trading. Supply and demand dictates price primarily. You could buy e-currency that has historically performed well (buying the trend) or go the opposite way and buy those that are under-performing, looking for a turn-around. You can even chart them if you like.
Leverage, that double-edged sword that Futures Traders are so familiar with is also present in e-Currency Trading. You can borrow against your portfolio to buy more e-currency. The compounding affect is almost outrageous. Some would argue that you never have to pay back the leverage. I contend that it is paid back if you closed your e-Currency account, because your final balance would be less the amount leveraged. The point here is the leverage in futures trading is often times the demise of a well intended trader versus the leverage
afforded an e- currency trader combined with the daily compounding affect creates portfolio growth at a phenomenal rate. It is not uncommon to see portfolio growth of 20 to 40% per month.
Futures Trading and e-Currency Trading have a common downside. The learning curve is huge and can be frustrating and costly. Each has unique terminology, which is impossible to work around until you have a good understanding of the meaning. Thankfully in this world of information, we are able to find resources online and offline that shorten that curve. How much it is shortened is dependent on how much time you want to dedicate.
Industry experts have debated for years the optimum amount one should fund their futures trading account with. The obvious moving target is enough capital to withstand the drawdown periods. Many factors go into this but I have seen numbers range anywhere from $10,000 to $50,000 and up. If this is the case then there is little doubt why most futures traders lose as most are willing to fund only the amount required to cover Margin or the Brokers account minimum usually a few thousand dollars. One of the biggest reasons for small business failure is being under capitalized, the same holds true in futures trading.
E-Currency Trading is different in that the experts recommend starting with a few hundred dollars and let the system build your account. Whatever route you choose, only trade with risk capital.
E-Currency Trading certainly has advantages over traditional
futures trading and may well be worth your serious
consideration. Internet Commerce is in the Billions and is
forecast to triple over the next 10 years. Many are seeing E-
currency Trading as a ground floor opportunity with huge growth
potential.
About the Author
Merv Thompson Author and operator of www.futures- brokers-review.com a website providing tools, resourses and reviews for todays trader.
Additional information on e-currency trading can be found at e- Currency Info
^ Top | Copyright © Forex Area | Student Loan Help & Advice | Forex Killer - Make A Killing In Forex