Why Trade the FOREX

My goal in writing this article is to demonstrate the benefits of trading in the Forex market. However, there is a myth that I want to dispel before proceeding. The myth is that there is a difference between trade and investment. To dispel the myth that quote from Al Thomas, President of Williamsburg Investment Company, who wrote "if it rises, do not buy it." He said: "Anyone who invests is a trader, only the period of time is different." This is a lesson that I took seriously after a blow to the stock market in 2000.

So now let's compare features of currency trading to trading in stocks and commodities.

Liquidity - The Forex market is the most liquid financial market in the world around 1.9 trillion dollars traded daily. Trading in the market about 440 million dollars a day, and trading of U.S. securities market of 200 million dollars a day. This ensures better trade execution and prevents market manipulation. Trade also can be enforced.

Trading Times - The Forex market is open 24 hours a day (except weekends) which means that the United States opens on Sunday at 15:00 (EST) and ends on Friday at 5:00 (EST ) which allows traders to choose the activity Sometimes they want to trade. Time commodity trading are all over the board depending on the product you are trading. Including extended trading times U.S. stocks can be exchanged 8:30 to 18:30 (Eastern Time) Monday through Friday.

Leverage - Depending on your Forex account size, leverage may be 100:1, although there are Forex brokers that offer leverage up to 400:1 (not that I would never recommend such leverage). Leverage in the stock market can be as high as 4:1, and in the commodities market, the influence varies depending on the product sold, but can be very high. Because the commodity markets are not as liquid as the forex market, the influence is inherently more risky. Although I have never been excluded from trade in goods by the limit of days, the fear was in the back of my mind.

Trading costs - Transaction costs in the Forex market is the difference between purchase price and sale of each currency pair. No brokerage commissions are charged. For both capital markets and raw materials, there are transaction costs and brokerage commissions. Even when using discount brokers, the costs add up.

Minimum investment - You can open an account forex trading for just $ 300.00. They took $ 5,000 for me to open my account in the futures market.

Focus - 85% of all business transactions are conducted in seven major currencies. In the U.S. stock market alone, there are 40 000 shares. There are just over 200 commodity markets, although many are so fluid that are not traded except by hedgers. As you can see, the lowest number of instruments allows us to look more closely at each.

Implementation of the Trade - The Forex market, trade execution is almost instantaneous. The markets, both capital and raw materials, you can expect a broker to execute his orders and the results are sometimes contradictory.