custom web search

Monday, September 7, 2009

WHY FOREX TRADING ?

There are some huge advantages in trading the forex markets vs. futures or stock markets. First, with the forex you get 24 hour liquidity, and as noted above, these are the most liquid markets available anywhere.

Second, with most trading platforms you get free real time quotes and charts. Also, because there is no centralized market location or exchange such as with stocks or futures, there are no exchange fees to pay.

Another very comforting advantage that forex trading has over futures and stocks is that there is no debit risk. That's because if a client were to be in an open loss position that exceeded his margin requirement, the trading platform will automatically liquidate the position.

If there was a catastrophic event, you can never lose more money that what you have in your account.

And how about this - if you choose to trade the forex markets on your own, there are no commission charges! There is just the bid and ask spread (as in any market) for the market makers, with the difference being that in the forex markets these bid/ask spreads are very small.

Something to also consider is that in trading with most broker dealers, you get more consistent pricing options. Not so in either the stock or futures markets, where the slippage can be substantial. Furthermore, please note that in the forex markets, we can sell short the market just as easily as buying. It makes absolutely no difference - they're both executed at just the click of a button. Because the margin requirements are extremely small, tremendous leverage is available. These 2 factors of leverage and easy risk control are what make the forex markets such a great opportunity. Please remember that without proper risk management, this high degree of leverage can lead to large losses as well as gains.

If you've every had any experience trading stocks or commodities, you know that these above-noted differences are very, very significant.

The above information should give you a good idea as to what the forex markets are. However to trade profitably, you need to learn how to properly analyze the markets so that you can achieve consistent success. In my opinion, the Peter Bain ForexMentor course is second to none and is definitely worth the time to explore further.

No comments:

Post a Comment