An increasing number of knowledgeable investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency due to following reasons:
1) FOREX could be the largest financial market on earth.
With a daily trading number of over $1.5 trillion, the spot Currency markets can absorb trading sizes that dwarf the ability of some other market. In point of fact, as compared to the $50 billion daily niche for equities or the $30 billion forward market, it becomes quickly apparent this gives you, and millions of other FOREX traders, almost infinite trading liquidity and flexibility.
2) FOREX is a True 24-hour market.
Currencies never sleeps. Trading positions may be entered and exited at at any time world wide, 7 days a week, 5.five days a week. There is absolutely no expecting an opening bell such as the way it is of stock trading. This is a 24- hour, continuous electronic (ONLINE) foreign currency exchange that never closes. This is very desirable to suit your needs in order to trade on a part-time basis, since you also can pick if you want to trade: morning, noon or night.
3) There's never a Bear Market in FOREX.
You'll have access to a seamless exchange of currencies. Currencies trade "pairs" (by way of example, US dollar vs. JPY (YEN) or US dollar vs. CHF (Swiss franc), either side of the currency pair (for instance, USD/CHF) is actually moving in regards to the opposite. Thus, once you buy a particular currency, you are actually simultaneously selling the other currency for the reason that particular pair. As the market moves, on the list of currencies will increase in value versus additional. Naturally, it truly is your choice to choose the correct currency being long ( you bought) or short( you sold).
4) High Leverage - approximately 400:1 Leverage.
You might be permitted to trade foreign currency using a highly leveraged basis - up to 400 times your investment with Fenix Capital Management, LLC and with various other brokers.
Standard 100,000- US$ currency lots may be traded with as small as 0.25% margin, or $250.
Mini FX accounts are permitted to have business dealings with just 0.25% margin, meaning, just $25 permits you to control a 10,000-unit currency position.
Futures traders, who are utilized to margin requirements generally add up to 5-7%-8% in the contract value, will immediately know that the foreign exchange market provides much greater leverage, for stock traders, who must post leastways 50% margin, there’s no comparison. When you’re seeking an effective utilization of trading , trade the Forex Market.
5) Price Movements might be Highly Predictable.
Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currency develop undoubtedly are a significant advantage for traders who utilize "technical" methods and techniques.
Unlike stocks, currencies possess the tendency to produce strong trends. Over 80% of volume is speculative in nature and, because of this, the market frequently overshoots after which it corrects itself. Being a technically-trained trader, you can easily identify new trends and breakouts, to go into and exit positions.
6) That you do not pay commissions or fees to trade FOREX
When you trade FOREX, through Fenix Capital Management LLC (FCM) it is possible free of charge of commissions and fees , in spite of your size.
Fenix Capital Management LLC, requires a small minimum amount to open a brokerage account, only US$ 200 and they also usually do not charge commissions or fees to trade or to maintain a merchant account, irrespective of your money balance or trading volume.
7) You won't have to pay trading fees or exchange fees.
You will find none of the usual fees, which futures and equity traders are utilized to pay:
NO exchange or clearing fees,
NO NFA or SEC fees.
Because currencies trade over-the-counter (OTC), via a global network, in FOREX, any particular item with your trading screen, is exactly what you have, allowing you to make quick decisions on your trades and never have to worry or take into account fees that may affect your profit/loss or slippage.
Inside the equity and commodity markets, you have to pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which lowers transaction costs.
8) The best way to Forex brokers generate profits if they don't charge commissions?
Like every traded financial products, over-the-counter currency stock trading involves an offer/ask spread, which represents the when your counterpart would likely to trade. Your broker will receive a part of this bid/ask spread.
As the currency forex market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-night and day. Stock traders could be more vulnerable to liquidity risk and typically receive wider trading spreads, especially during after-hours trading.
9) Market Transparency.
Market transparency is especially desired in almost any trading environment. The harder industry transparency, a lot more efficient the market industry becomes. Unlike other markets where transparency is compromised (similar to the various recent scandals), FOREX financial markets are highly transparent (i.e., analyzing countries, and accessing real-time research / news, is easier than analyzing companies).
Because of this transparency, being an FX trader, it will be easy to apply risk management strategies matching in your fundamental and technical indicators.
10) Instantaneous Order Execution
The FX market provides the highest level of market transparency of the many real estate markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds.
In Forex, order execution 's all-electronic and furthermore , as you will be trading via a web-based platform, instantaneous execution is routine.
There won't be exchanges, no traditional open-outcry pits, no floor brokers, and therefore, no delays.( will probably be continued )
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