Why Trade Forex?
Do you wish you
could retire early, work less and live more?
Have you been
yearning for financial freedom, but not sure how you can achieve it?
Forex trading could
be your key to financial freedom.
In order to
learn how to deal with money successfully, you have to first overcome your
fear
1. Fear of not
having enough money.
2. Fear of taking
action with your money.
It is all about
how to make money work for you, so that you can have more than enough. How can
you get money through honest means?
1. Work
2. Inheritance
3. Invest the money
you have.
The Forex market
is the largest and most liquid market in the whole world. The great thing is
that technology has made Forex trading extremely accessible to retail investors
and traders, and you can easily trade Forex from home or anywhere in the world.
Forex offers a world of endless opportunities, where it is possible to make
your dreams come true. Want to make lots of money? Want to get out of the
corporate world? Want to grow your investment fund? It is all within your
reach, if you start off with a strong foundation built on learning and
education.
Fulfill your
life's hopes and dreams with your potential. Use investment as a vehicle to
come closer to what you desire and deserve in life.
Advantages of Forex
A Global 24-hour Market
The Forex market
is unique in that traders can access a 24-hour market very
conveniently, without having to wait for the markets to open. At any time,
there is always a major financial center open where banks, hedge funds,
corporations, and individual speculators are trading currencies. Traders can
trade during anytime of the day or night, and do not have to wait for any
markets to be opened before placing their trades. This is particularly
beneficial to people who hold nine-to-five jobs since they can trade it without
any problems in the evening or night. In stock or futures markets, you can only
actively trade for less than 7 hours a day.
FX
market
|
GMT
|
Tokyo
Open
|
23:00
|
Tokyo
Close
|
08:00
|
London
Open
|
07:00
|
London
Close
|
16:00
|
New
York Open
|
12:00
|
New
York Close
|
21:00
|
The market runs 24 hours because markets around the
world open and close at different times.
With the stock
and futures markets, one would need to have access to electronic communication
networks (ECN) for pre-market trading, or would have to wait till the markets
open. The chances of the prices gapping up or down against you are high,
especially if there have been news while the markets are closed.
The Most Liquid
Market on The Planet
According to the
Central Bank Survey of the forex market conducted by the Bank for International
Settlements, as at 2004, daily trading volume reached an all-time record high
of $1.9 trillion, up 58% from 2001. Do you know that this humongous daily
trading volume is about 20 times that of the New York Stock Exchange and the
Nasdaq combined?
With about 80
percent of foreign exchange transactions having a dollar leg, you don't have to
worry about liquidity issues when trading any of these big-economy currencies,
which are namely, USD, GBP, Euro, CHF, JPY, CAD, AUD and NZD. However with
stocks, futures, options, or commodities, you tend to be restricted by their
illiquidity especially during after-hours.
Limited Slippage
Most brokers
guarantee fills on stop-loss and limit orders on up to a certain number of
standard lots, and provide instantaneous trade executions from
real-time quotes which are displayed on the screen. There is usually no
discrepancy between the displayed price and the execution price during normal
market conditions. However, you may be subjected to slippage when you trade
during news or during periods of high volatility. In the futures and stock
markets, execution price can be vague because all orders must be done through
the exchange, and slippage and partial fills are common especially in the
futures market due to the chaotic open-outcry system.
Buy Or
Short-sell Anytime
When trading
stocks, short-selling is only allowed with an uptick, so it can be very
frustrating for traders to wait and see their stocks trend downward while
waiting for an uptick. In the futures market, there is a limit down/limit up
rule which kicks in when the contract value declines or increases by more than
a certain percentage from the previous day's close. However, in the forex
market, you can short a currency pair anytime without having to wait
for any upticks, and this translates to a more efficient and instant order
execution.
Profit In All
Market Conditions - bull, bear or sideways
With forex, you
can have the freedom to long or short currency pairs whenever the opportunity
comes, since there are no exchange-enforced restrictions on daily activities,
like for stocks or futures.
High Leverage
The forex market
offers the highest leverage available for any market. Leveraged trading allows
forex traders to execute trades up to $500,000 with an initial margin of only
$5000. That means you get as high as 100-to-1 leverage or more,
offered by most online forex firms on standard-sized accounts. However, it is
important to note that while this type of leverage allows investors to maximize
their profit potential, the potential for loss is equally large. Leverage of up
to 400-to-1 can be offered on mini trading accounts due to the smaller lot
sizes and lower minimum account deposit requirements. You can select the amount
of leverage that you are most comfortable with.
Differences
between Forex and Stocks
Forex
|
Stocks
|
Largest
and most liquid market in the world
|
Liquidity
dependent on stock’s daily volume
|
24-hour
trading action for 5.5 days a week
|
Less
than 7 hours of trading time per day
|
Can
profit in both bull and bear markets
|
Most
people buy stocks instead of short-sell
|
Can
short-sell anytime
|
Need to
obey uptick rule in order to short-sell
|
Minimum
slippage and order errors
|
More
room for slippage and error
|
100:1
leverage on standard-sized accounts
|
2:1
leverage to the average stock investor
|
Differences
between Forex and Futures
Forex
|
Futures
|
Largest
and most liquid market in the world
|
Liquidity
dependent on month of traded contract
|
24-hour
trading action for 5.5 days a week
|
Varying
trading hours based on the markets
|
Can
profit in both bull and bear markets
|
Tend to
have extended bearish periods
|
Can
short-sell anytime
|
Trading
restricted by limit up/down rule
|
Minimum
slippage and order errors
|
More
room for slippage and error
|
100:1
leverage on standard-sized accounts
|
Smaller
leverage
|
Differences
between Forex and Options
Forex
|
Options
|
Largest
and most liquid market in the world
|
Liquidity
depends on underlying asset & expiry date
|
24-hour
trading action for 5.5 days a week
|
Not 24-hour.
Varying trading hours based on the exchanges
|
Easier
to calculate stop beforehand
|
Difficult
and unreliable to place stops on underlying asset
|
Minimum
slippage and order errors
|
More
room for slippage due to lack of liquidity
|
100:1
leverage on standard-sized accounts
|
Leverage
depends on the type of option transaction you want to engage in. Selling
Naked Calls or Puts generally requires a huge amount of margin
|