Why Trade Foreign Currencies ?
There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market :
No commissions
No clearing fees
No exchange fees
No government fees
No brokerage fees
Brokers are compensated for their services through something called the bid-ask spread.
No Middlemen
Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.
No Fixed Lot Size
In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250.
Low Transaction Costs
The retail transaction cost ( the bid/ask spread ) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
No Waiting for Opening Bell
A 24-hour market. There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps.
This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade - morning, noon or night. No one can corner the market. The foreign exchange market is so huge and has so many participants that no single entity ( not even a central bank ) can control the market price for an extended period of time.
Leverage
In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies.
Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
High Liquidity
Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level ( a limit order ), and/or close a trade if a trade is going against you ( a stop loss order ).
Free Demo Accounts, News, Charts, and Analysis
Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for poor and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
Mini and Micro Trading
You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and micro trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average ( poorer ) individual who doesn't have a lot of start-up trading capital.
With the Forex Killer Software at your fingertips you can start trading with 1000 usd or even less. Just keep in mind that more capital will minimize the risk of loosing + give you greater profits.
Best wishes my friend and make it a wonderful day !
Good Luck !
To Your Trading Success
Wingcent Ning
Success-Biz Marketing
wingcent@gmail.com
http://mysignatureforex.blogspot.com
Singapore
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