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Advantages Forex Trading Has Over Other Investments

In fact, there are s lot of different benefits to the trading Forex market instead of stocks and futures:

– Forex market has low margin

As the stock and futures traders, a Forex trader is able to control a large amount of the currency by putting up a small amount of the margin. But, the margin requirements that are needed for trading futures are traditionally about 5 per cent of the total value of the holding or 50 per cent of the total value of the stock, the margin requirements for the Forex market is only about 1 per cent. For instance, margin needed to trade the Forex market is $100 for every $10,000. This means that when you trade the Forex market your money could play 5 times as much value of the product as a future trader’s and 50 times more than a stock trader’s. While trading on margin, this could be quite a profitable way to create an investment strategy, however it is necessary that you take some time to understand all the risks that are involved. You need to be sure that you perfectly understand how your margin account will work for you. And thus it is necessary to make sure that you carefully read the margin contract between you and your clearing company.

– Forex market has no exchange fee and commission

While trading in futures, you need to pat brokerage and exchange fees. But trading the Forex market has the advantage of being commission free. This is much better for you. The Forex trading is a worldwide interbank market that allows purchasers to be matched with sellers in an instant.

– Forex market offers rollover of positions

When contracts expire in the futures market, it is necessary to plan beforehand whether you will roll over your trades. At the same time, trading positions in the Forex market expire every two days and you have to roll over each trade so that you could stay in your current position.

– Forex market is round the clock marketplace

Trading futures, you are actually limited to trading only during the few hours that each market is open in any one day. If the main trade breaks out when the markets are closed, you will not have a way of getting out of it till the market are-opens, which can be a lot of hours away. On the other side, the Forex market runs round the clock 5 days a week. The trading day starts in New York (the USA) and goes across the globe through Europe, Asia, Australia and then returns to the USA. You have an opportunity to trade the Forex market any day and time when you want or when it is convenient to you from Monday to Friday.

As in any other niche of life foreign exchange market needs some knowledge.

Surely, you can start forex trading and get quite successful about it. However sooner or later the losses will come. It is precisely when you might think “Why didn’t I start with a nice forex books?”

This does not imply that after reading even the top materials you will start making money, but this info will save you from many traps. And even if you decide to get the assistance of a forex managed accounts service, still you will be able to make a much wiser decision.

And some general tips – today the Internet technologies give you a really unique chance to choose exactly what you require at the best terms which are available on the market. Strange, but most of the people don’t use this chance. In real practice it means that you must use all the tools of today to get the information that you need.

Search Google or other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a smart and nicely balanced decision.

And also sign up to the RSS on this blog, because we will everything possible to keep this blog tuned up to the day with new publications about Forex currency trading.


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