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FOREX Trading
Copyright 2005 Dave Markel The Foreign Exchange market, also referred to as the "FOREX" or "FX" market is the largest financial market in the world, with a daily average turnover of US$1.9 trillion - thirty times larger than the combined...Read More
How to Choose the Best Forex Trading Course
Before a person drives a car they learn how to drive. Before they achieve a professional license such as those needed by doctors, lawyers, insurance agents and real estate agents, a person must have training and education. It only makes...Read More
Introduction to FOREX Trading
Introduction to FOREX Trading If you're not sure just what the "FOREX" is, don't worry, you're not alone. Most everyone has certainly heard of buying and selling stocks and bonds, FOREX still remains a mystery for many. The Foreign...Read More
Trying Forex Trading with the Best Strategy and Approach
With the day things are today, more people are getting interested in investing their money to make them grow faster. The problem is, not too many people are willing to take the risk of investing it because of the risks, so some of them just...Read More
What is FOREX Foreign Exchange Trading
This article will explain some of the basic principals of FOREX Foreign Exchange Trading. It will also explain why FORES has seen such a large increase over the past few years. Foreign Exchange Market, or Forex as it...Read More
How Does FOREX Compare to Other Investment Markets?
How Does FOREX Compare to Other Investment Markets?
by Toby Smitz
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Commission-free trading:
In the equities and futures markets, individuals generally place their orders with a broker, who in turn routes the order to a market maker or exchange where the order is actually executed.
As a result, two parties charge fees: the broker charges a commission, and the firm who executes the order on the exchange charges a spread (a cost that is usually hidden in the equities and futures market, but is transparent in the FX market). In the FX market, you pay only a very small spread - and thus enjoy a much lower transaction cost.
Automated Margin Watcher:
Trading on margin, or with borrowed funds, in the equities and futures market is extremely risky, as the trader can be liable for more than their original deposit if the position goes against them.
In the FX market, though, trading on margin does not possess the same risk: traders' positions will be closed out if the position goes against them and their account value falls below their margin requirement.
Short Selling Without An Uptick:
Short selling, or the ability to enter a sell position and profit if the price goes down, is just as easy as buying in the currency market. While most equities markets have rules that hinder
short selling - like the uptick rule, which states that the last price must have been an upward movement before a trader can enter a short order - the currency market does not have the same rules. Traders who think the euro will rise in value can simply buy euros and sell dollars;
alternatively, those who think the euro will fall in value can sell euros and buy dollars, all through the same single trading account and with the same amount of ease. As a result, the currency market presents opportunities for profit regardless of economic cycles.
24 Hour Trading:
While most exchanges have limited hours, the banks and market makers that operate the currency market are open 24 hours a day for trading. With most forex brokers, traders have access to the FX market from Sunday 5 PM EST to Friday 4 PM EST.
100:1 Leverage on Standard Accounts:
The leverage ratio, specifies the monetary amount a trader can trade above and beyond his/her initial deposit. The FX market allows for greater maximum leverage, and thus allows traders to more precisely customize their level of risk aversion.
About the Author
Toby Smitz is a full time forex trader at fxtsp.com. Click Forex to vist our site.
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