WHY FOREX?

There are several advantages and benefits of trading the Forex market.   Traders across the globe are discovering the new skill of trading in the non-exchange FX market.  Take some time to research some of the advantages of the world’s largest market below:

The Forex market never rests. It opens every Sunday at 4 PM EST to its close every Friday at 4 PM EST. The world’s first true global marketplace, almost always open for trading. When we wake up, Sydney and Hong Kong are going to sleep, then Frankfurt, London and back to the East Coast of USA in New York. This market is excellent for those traders who want to trade it part time because its their choice which time of day suits their needs best, unlike other markets. 

Liquidity

With $3.2 trillion changing hands every day, the Forex market is extremely liquid. Whether it is 12PM or 12AM, there are always traders willing to buy and sell foreign currencies.   With the click of a mouse you can instantaneously buy or sell any currency pair.

Investors are able to trade currency pairs on a highly leveraged basis – up to 200 times their investment. For example, an investment of $250 would allow a trader to control up to $100,000 of any particular currency. Leverage allows the trader to increase their position in the marketplace, however the high degree of leverage that is often obtainable in Forex trading can work against you as well as for you.  The use of leverage can lead to large losses as well as gains. 

Currencies trade in ISO pairs; a country’s currency has value that is relative to the currency of another country. The most popular currency pair is the EUR/USD pair, followed by the GBP/USD pair. When you go long (buy) the GBP/USD, you are buying the Pound as you simultaneously sell the US Dollar. When you go short (sell) the GBP/USD, you sell the Pound as you simultaneously buy the US Dollar.    It is just as simple to trade mechanically by either selling or buying.   You have the opportunity to profit or lose either way.

The Forex market is the most cost efficient market to trade.   Exchange fees are non existent due to the fact that the Forex is only traded online and not in a fixed location. The only fees you pay are spreads: the difference between the bid and asked price for the currency pair. The spread is usually is less than 0.1% under normal market conditions.

Individuals can open a live trading account with as little as $250 dependant upon their broker (FDM) of choice.

Most Forex brokers will allow you to open a free ‘demo’ trading account. A ‘demo’ account works just like a ‘live’ account except that you do not deposit any money into the account. The broker funds the account with ‘demo’ or play money. This is a smart way if you are new to the market to get the mechanics of trading down before you ever put any of your own risk capital at play in the market.