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Currency Trading Information Channel |
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Advantages of Trading FOREX Over Stocks and CommoditiesThere are many advantages to Trading FOREX as your main income generator. Let's start by something that may be worrying you already. "Do I need a Diploma or some kind of Certification to trade FOREX?" The answer is this: When attempting to make more profit than losses on the fluctuation of exchange rates between major currencies (i.e., Trading the FOREX), nobody is going to ask you for a diploma, a formal license or verify the amount of hours you've spent studying the Foreign exchange market and banking industry. All you need is the proper training. But this is not the only advantage you get when trading FOREX, compared to other ways of investment and speculation; i.e. Stocks and Commodities. You have a whole bunch of advantages over these other options that will be enumerated in the following paragraphs. The Main Benefits of Trading the FX Spot Market: 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, six 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, mutually-inclusive (two- way) exchange of currencies. Meaning, because currencies trade in "pairs" (for example, US dollar vs. yen or US dollar vs. Swiss franc), one side of every currency pair (for example, USD/JPY - JPY = YEN) 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 or short. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means you have equal potential to profit in both a rising or falling market. 4): High Leverage - up to 200:1 Leverage. You are permitted to trade foreign currencies on a highly leveraged basis - up to 200 times your investment with some brokers. This is primarily attributed to the higher levels of liquidity within the currency markets. Standard 100,000- unit currency lots can be traded with as little as 1% margin, or $1,000. Mini FX accounts are permitted to trade with just 0.5% margin -- in other words, just $50 allows you to control a 10,000-unit currency position. Futures traders, who are accustomed to margin requirements generally equal to 5%-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 is no comparison. If you are looking for an efficient use of trading capital, this is it! 5): Price Movements Are Highly Predictable. Although currency prices in the FX market may be volatile, they 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 correct "technical" methods. Unlike stocks, currencies rarely spend much time in tight trading ranges and 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, which provide for multiple opportunities to enter and exit positions. 6:) Commission-free Trading and Low Transaction Cost When you trade FOREX, through one of our recommended brokers (this info is in our private resources section), you'll do it totally commission-free! These brokers don't charge commissions to trade or to maintain an account, and that goes for all clients trading the FOREX through them, regardless of your account balance or trading volume. Even Mini FX traders can buy and sell currencies online, commission-free. What about trading fees? There are none of the usual fees to which futures and equity traders are accustomed -- no exchange or clearing fees, no N_F_A or S_E_C fees. Because currencies trade over-the-counter (OTC), via a global electronic network -- in FOREX, what you see 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 equities 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. So, if FOREX broker don't charge commissions, how do they make money? Like all traded financial products, over-the- counter currency trading involves a bid/ask spread, which represents the prices at which your counterparty is willing to trade. 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. 7): Instantaneous Order Execution and 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 Enron scandal), FOREX markets are highly transparent (i.e., analyzing countries, and having access to real-time research / news, is easier than companies). Because of this transparency, as an FX trader, you will be able to exercise risk management strategies in accordance to the fundamental and technical indicators we teach at RapidForex.com 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. Markets that do not offer executable prices and force traders to absorb slippage obviously compromise the trader's profit potential considerably. In the forex world, 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. Omar Vargas
 MORE RESOURCES updated Fri. January / 15 / 2021How to Trade Forex? - A Guide to Forex Trading in 2021 DailyForex.com What Are the Best Forex Trading Platforms? Market Realist Why Forex Trading is so Popular in Africa? The African Exponent Understanding currency trading and its dynamics Nairametrics USD/INR: Rupee Edges Lower In Risk Off Trading Currency Live Canada shares lower at close of trade; S&P/TSX Composite down 0.10% Investing.com India Ethereum Falls 11.76% In Bearish Trade Investing.com India Currency Overview: Digital euro, Turkish awakening and the return of the dollar - Marketscreener.com UK shares lower at close of trade; Investing.com United Kingdom 100 down 1.17% - Investing.com India UK shares lower at close of trade; Investing.com United Kingdom 100 down 1.17% Investing.com India 4 Simple Steps to Start Forex Trading for Beginners Yahoo India News What Is Forex Trading? Forbes Asian shares mixed following Biden speech, Wall St retreat Martinsville Bulletin 12 IRS Audit Red Flags for Retirees Kiplinger's Personal Finance Euromoney Forex: Market dislocation buoys non-banks Euromoney magazine US Dollar Index advances to90.60, data eyed Currency Live Bitcoin is back above $36,000, but big investors are wary - Mark Cuban says crypto is 'exactly' like the .. Business Insider London Stock Exchange : Bloomberg's Big Challenger Can't Afford to Slip -- Heard on the Street Marketscreener.com India's Dec trade deficit widens to $15.44 bln Investing.com India GBP/USD Forex Signal: Bearish Price Channel DailyForex.com GBP/EUR: Pound Pushes Over €1.1250 Currency Live EUR/USD Forex Signal: Bullish Trend Resuming DailyForex.com US Consumer Sentiment Preview: Expectations look rich, dollar could receive a (second)... Forex Crunch EUR/USD edges back below 1.2200 Currency Live GBP/EUR: Pound Hits 2 Month High Currency Live USD/INR: Rupee Advances As Stocks Hit Record High Currency Live Forex Trading Terms You Need to Know Before Trading North Forty News Forex Brokers: Are They a Scam? | Investing | US News U.S News & World Report Money What You Need To Know Before Starting A Forex Trading Business NuWire Investor USD/PKR: Rupee Declines, LSM Rises Currency Live A Forex Trading Guide For Beginners | Sponsored | state-journal.com State-Journal.com A guide to forex trading instruments The Boca Raton Tribune Will Coinbase list BSV? CoinGeek Everything To Know About Getting Into Forex Trading GQ Australia Alleged RCMP mole accused of selling secrets to kingpin money launderer and terror-financier’s network Global News The FINANCIAL - Making Money By Forex Trading The FINANCIAL How does the derivatives market work? | MyWalletHero Motley Fool UK Facts You Need To Know About Forex Trading Forbes India Dollar Index sees little action as US President-elect Joe Biden unveils coronavirus rescue... Forex Crunch How Forex Trading Works Market Realist Forex Market: Unlocking Opportunities for Investors Visual Capitalist FOREX-Dollar finishes week stronger as US data hurts risk appetite Investing.com India DAX Forecast: Continues to Kill Time DailyForex.com Forex vs. Cryptocurrency Trading, Explained Cointelegraph What You Should Know About Forex Trading Signals Robotics and Automation News Timing Entry And Exit When Forex Trading - NuWireInvestor NuWire Investor NZD/USD bulls taking charge in... Forex Crunch
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