Why Trade the particular FOREX? - Finance

My objective for writing this article is to demonstrate to you the advantages of trading on the FOREX marketplace. Nevertheless, there is one myth that I want to dispel ahead of I go further. The myth is that there is a difference between trading and investing. To dispel that myth I quote from Al Thomas, President of Williamsburg Investment Company, who wrote "If It Does not Go Up, Do not Acquire It". He mentioned "Everyone who invests is a trader, only the time period is numerous." It is a lesson that I took seriously immediately after taking a beating in the stock marketplace in 2000.So now, let's compare capabilities of currency trading to those of stock and commodity trading. Liquidity - The FOREX marketplace is the most liquid monetary marketplace in the globe about 1.9 trillion dollars traded daily. The commodities marketplace trades about 440 billion dollars a day, and the US stock marketplace trades about 200 billion dollars a day. This ensures improved trade execu tion and prevents marketplace manipulation. It also ensures quickly executable trading. Trading Times " The FOREX marketplace is open 24 hours a day (except weekends) which implies that in the US it opens at 3:00 pm Sunday (EST) and closes Friday at five:00 (EST), allowing active traders to choose the times they want to trade. Commodities trading hours are all more than the board depending on which commodity you are trading. Including extended trading times US stocks can be traded from 8:30 am to 6:30 pm (ET) on weekdays. Leverage " Depending on your FOREX account size, your leverage might be 100:1, although there are FOREX brokers that deliver leverage of up to 400:1 (not that I would ever advocate that kind of leverage). Leverage in the stock marketplace can be as high as 4:1, and in the commodities marketplace, leverage varies with the commodity traded but it can be very high. Due to the fact the commodity markets are not as liquid as the FOREX marketplace, its leverage i s inherently riskier. Although I was by no means shut out of a commodity trade by the day limit, the worry was continually in the back of my thoughts. Trading costs " Transaction costs in the FOREX marketplace is the difference between the invest in and sell price tag of every currency pair. There are no brokerage fees. For both the stock and the commodity markets, there are transaction costs and brokerage fees. Even when you use discount brokers, those fees add up. Minimum investment " You can open a FOREX trading account for as small as $300.00. It took $five,000 for me to open my futures trading account. Concentrate " 85% of all trading transactions are made on 7 major currencies. In the US stock marketplace alone there are 40,000 stocks. There are just more than 200 commodity markets, although very a couple of are so illiquid that they are not traded except by hedgers. As you can see, the fewer quantity of instruments makes it possible for us to study every one a great d eal more closely. Trade execution " In the FOREX marketplace, trade execution is almost instantaneous. In both the equity and commodity markets, you count on a broker to execute your trades and their outcomes are at times inconsistent. Whilst all of these capabilities make trading the FOREX marketplace especially attractive, it still calls for a lot of education, discipline, commitment and patience. All trading can be risky.

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