"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.