TRUTH ABOUT FOREX TRADING

The word forex is derived from Foreign Exchange and is the largest financial market in the world. It traded mainly through 24 hour-in working days inter-bank currencies. The Forex has a DAILY trading volume of around $1.9 trillion dollars 30 times larger than the combined volume of all U.S equity markets.

means that 1,898,574 stalled traders could each take 1 million dollars out of the Forex and would still have more money left than the New York stock would have daily!The Forex plays a vital role in the world economy and there wil always be a tremendous need for the forex. International trade increase as technology and communication increases. As long as there is international trade, there will be a forex market.The forex market has to exist so that a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollars.The forex market is a cash (or “spot”) inter-bank market.

By comparison, the currency futures market is only on percent as big.The currencies of the world are on a floating exchange rate and are always traded in Naira, Euro/Dollar, Dollar/Yen etc in excess of 85 percent of all daily.Japanese Yen, Swiss France and the U.S Dollar unlike the future and stock markets, trading of currencies is not centralized on an exchange.Forex literally follows the sun around the world. Trading moves from major banking centres of the U.S to Australia and New Zealand to the far East to Europe and finally back to the U.S.In the past the forex inter-bank market was not available to small speculators due to the large minimum transaction sizes and often-stringent financial requirements. Bank, major currency dealers and the occasional huge speculator used to be the principle dealers.

Only them were able to take advantage of the currency markets fantastic liquidity and strong trading nature of many of the world’s primary currency exchange rates.Today, foreign exchange market maker brokers are able to break down the larger sized inter bank units, and offer small traders the opportunity to buy or sell any number of these smaller units (lots).These brokers give virtually any trader including individual speculators or small or companies, the option to trade the same rates and price movements as the large payers who once dominated the market. Market makers quote buying and selling rate for currencies and they profit on the difference between their buying and selling rates.

Forex has been voted the best business in the whole world by forbes magazine and that is why great American companies like Bank of America, most all major banks, major corporations, and many small traders are all trading the $1,979 trillion dollar a day forex trading market.More and more investors and entrepreneur are shunning traditional financial markets, like stocks, bonds amp, commodities and building their fortunes in the foreign exchange (forex) market places.

WHY YOU SHOULD JUMP INTO FOREX TRADING:

1. Forex is the largest financial market in the world. With a daily trading volume of over $1.5billion, the spot forex market can absorb trading sizes that dwarfs the capacity of any other market.In fact, when compared with the $50billion daily market for equities or the $30billion fortunes market it becomes quickly apparent. This gives you and million of other forex traders, almost infinite trading liquidity and flexibility.FOREX IS A TRUE 24 HOUR MARKET.

2.The forex market never sleeps. Trading positions can be entered and exited at any moment-around the globe, around the clock, six days a week. There is no waiting for an opening bell as in the case of trading stocks. It is 24 hours, continuous electronic (ONLINE) currency exchange that never closes. This is very desirable for you if you want to trade on a part time basis because you choose when you want to trade morning, noon or night.THERE IS NEVER A BEAR MARKET IN FOREX.

3. You can have access to a seamless mutually-inclusive (two-way) exchange of currencies. Meaning, because currencies trade in “pairs” (for example, US dollar Vs Yen or US Dollar Vs Swiss franc), one side of every currency pair (for example, USD/JPY – JPY = YEN) is constantly moving in relation to the other.Thus, when you buy a particular currency, you are actually simultaneously selling the other currency In that particular pair. As the market moves, one of the currencies will increase in value versus the other of curse; it is up to you to choose the correct currency to be long or short.Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. This means you have equal potential to profit in both a rising or falling market.

4. High leverage up to 200:1 leverage: You are permitted to trade currencies in a highly leveraged basis up to 200 times your investment with some brokers. This is primarily attributed to the higher levels of liquidity within the currency markets. Standard 100,000 – unit currency lots can be traded with as little as 1% margin or $1,000.Futures traders, who are accustomed to margin requirements generally equal to 5% - 8% of the contract value, will immediately that the forex market provides much greater leverage, and for stock traders, who greater leverage and for stock traders, who must post at least 50% margin, there’s no comparison. If you are looking for an efficient use of trading capital.

5.Price movements are highly predictable: Although currency prices in the forex market may be volatile they generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the “technical” methods and strategies.Unlike stocks, currencies rarely spend much tone in tight trading ranges and have. The tendency to develop strong trends over 80% volumes is speculative in nature and as a result; the market frequently overshoots and then corrects itself. As a technically trained trader, you can easily identify new trends and breakouts, which provide for multiple opportunities to enter and exist position.

6.Commission: Free trading and low transaction cost when you trade forex through many brokers you willo do it totally commission free! These broker don’t charge commission to trade or to maintain an account and that goes for all clients trading the forex through them, regardless of your account balance or trading volume.This is repeating, no forex commission! What about trading fees? There is none of the usual fees to which futures and equity trades are accustomed no exchange or cleaning fees, no NFA or SEC fees. Because currencies trade over the counter (OTC) via a global electronic networking forex, what you see is what you get, allowing you to make quick decision on your trades without having to worry or account for fees that may affect your profit/loss or slippage.In the equities markets, you must pay both a commission and exchange fees. The over—the counter structure of the forex market eliminates exchange and cleaning fees, which in turn lowers transaction cost.So if forex brokers don’t charge commission, how do they make money? Like all traded financial products, over the counter currency trading involves a bid/ask spread which represent the prices at which your counter party is willing to trade. Because the currency market offers round the clock liquidity, you receive tight, competitive spreads both intra-day and night.Stock traders can be more vulnerable to liquidity risk and typically receive under trading spreads, especially during after hour trading.

7. Instantaneous order Execution and market transparency. Market transparency is the highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes, unlike other markets where transparency is compromised (like in the environ scandal) forex markets are highly transparent (i.e. analyzing countries, and having access to real time research/news is easier than publicly held companies. Because of this transparency, forex traders will be able to exercise risk management strategies in accordance to the fundamental and technical indicators.The forex market offers the highest level of market transparency out all the financial markets. Because of this order execution and fill confirmation usually occur in just 1 – 2 seconds. Markets that do no offer executable prices and force traders to absorb slippage obviously compromise the trader’s profit potential considerably in a nutshell let’s hear what forex traders say about FOREX “if you think what you do is exacting, you aren’t seen nothing yet. “trading forex is like picking money up off the floor. Not trading forex is like leaving it there for some one else to pick up” by Rock Booker http://www.robbooker.com/