“How To” Start Trading The Forex Market? Part 2
Why is FOREX trading so popular?
Because you can trade from anywhere. From your
kitchen table, bedroom, garage or from the nearest Starbucks coffeehouse ( most
of them have wireless Internet connection).
If you have or like to travel, take your laptop
with you and you can trade the FOREX anywhere in the world where you have an
Internet connection.
When you want to start trading the Forex Market
nobody is asking you for a diploma, a formal license or a proof of how many
hours you have spent studying the Foreign Exchange Market and/or Banking
Industry.
FOREX Trading is Economical and Start-up Costs
are Low!
You can open an account to trade Forex with as
little as US$ 200 at he most brokerage firms.
I personally do recommend Fenix Capital Management, LLC, which
offers a state of art Trading platform,
that allows you to place orders directly by clicking on the chart.
The Main Benefits of Trading the FX Spot Market
are:
YOU don't pay commissions or fees!
YOU can trade 24-hours a day !
YOU can trade up to 400:1 Leverage !
YOU can have FREE Streaming executable Price
quotes and live charts!
It is important to know the differences between
cash FOREX (SPOT FX) and currency futures.
In currency futures, the contract size is
predetermined.
With FOREX (SPOT FX), you may trade
electronically any desired amount, up to $10 Million USD.
The futures market closes at the end of the
business day (similar to the stock market).If important data is released
overseas while the U.S. futures markets is closed, the next day's opening might
sustain large gaps with potential for large losses if thedirection of the move
is against your position.
The Spot FOREX market runs continuously on a
24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York
Time Friday evening.
Dealers in every major FX trading center
(Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto)
ensure a smooth transaction as liquidity migrates from one time zone to the
next.
Furthermore, currency futures trade in non-USD
denominated currency amounts only, whereas in spot FOREX, an investor can trade
in almost any currency denomination, or in the more conventionally quoted USD
amounts.
The currency futures pit, even during Regular
IMM (International Money Market) hours suffers from sporadic lulls in liquidity
and constant price gaps.
The spot FOREX market offers constant liquidity
and market depth much more consistently than Futures.
With IMM futures one is limited in the currency
pairs he can trade. Most currency futures are traded only versus the USD.
With spot FOREX, you may trade foreign
currencies vs. USD or vs. each other on a 'cross' basis, for example: EUR/JPY,
GBP/JPY, CHF/JPY, EUR/GBP and AUD/NZD
More and more well informed investor and
entrepreneurs are diversifying their traditional investments like stocks, bonds
& commodities with foreign currency because of the following reasons: (will
be continued)
RISK WARNING:
Risks of currency trading: Margined currency
trading is an extremely risky form of investment and is only suitable for
individuals and institutions capable of handling the potential losses it
entails. An account with an broker allows you to trade foreign currencies on a
highly leveraged basis (up to about 400 times your account equity). The funds
in an account that is trading at maximum leverage may be completely lost if the
position(s) held in the account experiences even a one percent swing in value,
given the possibility of losing one's entire investment. Speculation in the
foreign exchange market should only be conducted with risk capital funds that,
if lost, will not significantly affect the investors financial well-being.
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