Benefits of Forex Trading
Cynthia Macy
1. LEVERAGE: In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make extraordinary profits and at the same time keep risk capital to a minimum. Some Forex firms 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.
2. LIQUIDITY: Because the Forex Market is so large, it is also extremely liquid. This means that 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 the online trading platform to automatically close your position at your desired profit level (limit order), and/or close a trade if a trade is going against you (stop order).
3. PROFIT IN BOTH 'RISING' AND 'FALLING' MARKETS: On the stock markets, you can only make money if shares are rising, but in economic recession and falling 'bear' markets, there is little chance of making big money. Forex is different. One of the most exciting advantages of FX trading is the ability to generate profits whether a currency pair is 'up' or 'down'. A trader can profit by taking a 'long' position, (buying the currency pair at one price and selling it later at a higher price), or a 'short' position, (selling the currency pair and buying it back at a lower price). For example, if you think the US dollar will increase in value vs. the Japanese Yen then you will buy Dollars and sell Yen (go long). If you think the Yen will increase in value against the Dollar then you will sell Dollars and buy yen (go short). As long as the trader picks the right direction, a potential for profit always exists.
4. 24 HRS: From Sunday evening to Friday Afternoon EST the Forex market never sleeps. This is very desirable for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
5. FREE 'DEMO' ACCOUNTS, NEWS, CHARTS AND ANALYSIS: Most Online Forex firms offer free 'Demo' accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for traders who would like to hone their trading skills with 'virtual' money before opening a live trading account.
6. 'MINI' TRADING: One might think that getting started as a currency trader would cost a lot of money. The fact is, it doesn't. Online Forex Firms now offer 'mini' trading accounts with a minimum account deposit of only $200-$500 with no commission trading. This makes Forex much more accessible to the average individual, without large, start-up capital.
Please visit the author's other trading sites to learn more about forex trading:
http://www.daytrade-forex.com http://www.daytradeforex.com http://www.daytradeforex.com/products.htm http://www.professionalforextrading.info http://www.professionalforextradingonline.info http://www.successtrading2000.com http://www.successtrading2000.com/forex http://www.tradecurrency.ca/education.htm http://www.shortterminvestingsite.com
About the author:
My name is Cynthia Macy and I've been trading various markets for over 12 years. I now concentrate on the forex market, as it has several advantages over trading other markets. If you'd like to learn more about forex trading, visit:
http://www.daytrade-forex.com Request the 'Trade of the Week' to see actual trades using our trading methods and strategies.
The latest information and news on Forex Trading:
[CaRP] Can't open cache file.
[CaRP] Unable to create/open RSS cache file.
Yahoo! News Search Results for forex
Forex Strategy Outlook: US Dollar Rallies Look Promising (Daily FX via Yahoo!...
A strong US Dollar reversal has led our forex trading strategies to go heavily long the resurgent currency, and our bullish dollar bias calls for further gains in said trend-following systems.
Forex Trade Desk Thoughts (TheStreet.com)
Forex values seem less likely to be set on forward growth and interest rate numbers, and far more likely to feed off the risk tolerance/aversion shown each day in equity markets.
Short-Term Forex Technical Outlook: EUR/GBP (Daily FX via Yahoo! Finance)
The British pound continued to weaken against the euro as investors scaled backed expectations for a rate hike by the Bank of England, and the decline in the interest rate outlook may keep the EUR/GBP range-bound over the near-term as market participants weigh the outlook for future policy.
FOREX-Yen retreats as stocks offer risk trades respite (Reuters via Yahoo! Ph...
* Cross/yen rises led by investor short-covering
Short-Term Forex Technical Outlook: GBP/JPY (Daily FX via Yahoo! Finance)
The British pound weaken against the Japanese yen to retrace the advance from the end of July, and the GBP/JPY may continue to hold a broad range throughout the month as investors weigh the outlook for a global recovery.
[CaRP] Can't open cache file.
[CaRP] Unable to create/open RSS cache file.
Yahoo! News Search Results for currencies
CURRENCIES: Dollar, Yen Rise As Stocks, Commodities Tumble (Nasdaq)
Both the U.S. dollar and the Japanese yen rose on Monday, as currency traders sought the safe-haven of low-yielding currencies after a slide in Chinese shares and a weaker-than-expected rebound in Japan's economy.
Currencies: Dollar, yen rise as stocks, commodities tumble (Market Watch)
Both the U.S. dollar and the Japanese yen rise as currency traders seek the safe-haven of low-yielding currencies after a slide in Chinese shares and a weaker-than-expected rebound in Japan's economy.
CURRENCIES: Dollar And Yen Rise As Equities, Commodities Drop (Nasdaq)
A weaker-than-expected rebound by the Japanese economy and a steep fall by Chinese shares translated into gains for the yen and the U.S. dollar, with both currencies enjoying safe-haven appeal as equity markets added to recent losses, strategists said.
CURRENCIES: Dollar And Yen Rise As Asian Stocks Plunge (Nasdaq)
The dollar and yen got a lift against major rivals in Asian trading Monday, as a regional sell-off led by Chinese shares sent investors into the perceived safety of lower-yielding currencies.
Asian Currencies: Ringgit Climbs on GDP Outlook, Peso Advances (Bloomberg)
Aug. 18 (Bloomberg) -- Malaysia?s ringgit led gains in Asia on speculation exporters sold the greenback after the local currency?s biggest slide in four months.