Benefits of the Forex Market

Benefits of the Forex Market

Trading the Forex market has become very popular in the last years. Why is it that traders around the world see the Forex market as an investment opportunity? We will try to answer this question in this article. Also we will discuss some differences between the Forex market, the stocks market and the futures market.

Some of the benefits of trading the Forex market are:

Superior liquidity

Liquidity is what really makes the Forex market different from other markets. The Forex market is by far the most liquid financial market in the world with more than 3 trillion dollars traded everyday. This ensures price stability and better trade execution. Allowing traders to open and close transactions with ease. Also such a tremendous volume makes it hard to manipulate the market in an extended manner.

24hr Market

This one is also one of the greatest advantages of trading Forex. It is an around the click market, the market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes on Friday at 5:00 pm EST when San Francisco terminates operations. There are transactions in practically every time zone, allowing active traders to choose at what time to trade.

Leverage trading

Trading the Forex Market offers a greater buying power than many other markets. Some Forex brokers offer leverage up to 400:1, allowing traders to have only 0.25% in margin of the total investment. For instance, a trader using 100:1 means that to have a US$100,000 position, only US$1,000 are needed on margin to be able to open that position. Remember leverage is like a double sword, it could work in your favor as well as against you.

Low Transaction costs

Almost all brokers offer commission free trading. The only cost traders incur in any transaction is the spread (difference between the buy and sell price of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency pair) in some pairs.

Low minimum investment

The Forex market requires less capital to start trading than any other markets. The initial investment could go as low as $300 USD, depending on leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level.

Specialized trading

The liquidity of the market allows us to focus on just a few instruments (or currency pairs) as our main investments (around 80% of all trading transactions are made on the seven major currencies). Allowing us to monitor, and at the end get to know each instrument better.

Trading from anywhere

If you do a lot of traveling, you can trade from anywhere in the world just having an internet connection.

All these benefits make the Forex market very attractive to investors and traders. But I need to make something clear though, even when all these benefits of the Forex market are notorious; it is still difficult to make a successful career trading the Forex market. It requires a lot of education, discipline, commitment and patience.

Forex Market vs. Futures & Stock Markets 

Wir persönlich nutzen OANDA  Dukascopy und Interactive Brokers als Hauptbroker.

Für die richtigen Charts sorgt ein Real Account mit MetaTrader4.

Zu empfehlen wäre noch MB Trading.

Die unten aufgeführten Links helfen euch hoffentlich den für euch passenden Broker auszusuchen.

BabyPips

ForexBrokerGuide

GoForex

ForexPeaceArmy

Hi Traders,

Für Anfänger empfehlen wir bei BabyPips vorbeischauen und da die Lektionen durchmachen. Das stellt sicher, dass die grundlegenden Begriffe in meinen Beiträgen verstanden werden und hilft euch euer Trading auf ein ganz neues Level zu bringen!

Viel Erfolg!

Wowa Trader

Hi,

I've found a nice little document about fundamentals on my computer.

Have a closer look if you like to:

Forex Factory Calendar Online

Right now I'm working on my trade checklist (before the trade, in a trade situation and afterwards analysis) and it takes quite a time but I hope to upload the file (with video instructions) tomorrow.

By the way: no trades for me today. There weren't too much opportunities --> I got bored with the markets and did some research & writing for our website.

Take care & I'll keep ya posted

Wowa Trader