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Understanding Technical Analysis
FOREX Trading Benefits
A Beginner's Guide to FOREX >
How to read a Forex Quote >
Understanding Margin >
Understanding Technical Analysis >
Understanding Fundamental Analysis >
How to calculate Profit / Loss >
Types of Order >
Fast Market Policy >
FOREX Trading Benefits >
FOREX FAQ >
FOREX Glossary terms >

1) The Largest Financial Market
With a daily trading volume of over $1.5 trillion - $1.9 trillion, the 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) 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, afternoon or night.

3) Never A Bear Market
You can have excess to a seamless, mutually-inclusive (two-way) exchange of currencies. Meaning, because currencies trade in “pair” for example US Dollar vs Japanese Yen or British Pound vs US Dollar, one side of every currency pair 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 buy or sell. 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 100:1
You are permitted to trade the currencies on a highly leveraged basis, up to 100 times your investment. This is primarily attributed to the higher levels of liquidity within the currency markets. Standard 100,000 contract size lot can be traded with as little as 1% margin or $1000. 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 100% margin.

5) High Predictable Price Movement
Although currency prices in the forex 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 “technical” methods and strategies taught. 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) 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, forex market is highly transparent. Because of this transparency, as a forex trader, you will be able to exercise risk management strategies in accordance to the fundamental and technical indicators. The forex 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 few seconds. Markets that do not offer executable prices, and force traders to absorb slippage obviously compromise the trader’s profit potential considerably.

 

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