ADVANTAGES OF FOREX TRADE

There are many benefits and advantages to trading Forex. Here are just a few reasons
why so many people are choosing this market:

• A 24-hour market. There is no waiting for the opening bell. From Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is very desirable for those who want to trade on a part-time basis, because you can choose when you want to trade morning, afternoon or night.

• Market Liquidity. Because the Forex Market is so humongous, it is also extremely liquid. This means that with a click of a mouse, under normal market conditions, you can instantaneously buy and sell at will. This is because of the availability of millions of traders participating in the same market. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (limit order), and/or close a trade if a trade is going against you (stop loss order).

• Profit from rising and falling market. The Forex market is a 2 way market. This means that you can make money irrespective of the direction that the market is moving at any point in time.

• No commissions. No clearing fees, no exchange fees, no government fees, no
brokerage fees. Brokers are compensated for its services through the bid-ask spread.

• No middlemen. Spot currency trading away with the middlemen and allows
clients to interact directly with the market responsible for the pricing on a
particular currency pair.

• No fixed lot size. In the futures markets, lot or contract sizes are determined by
the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot
Forex, you determine the lot size. This allows traders to participate with accounts
as small as $300.

• Low transaction cost. The retail transaction cost (the bid/ask spread) is typically
less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. This will be explained later.

• No one can corner the market. The Forex market is so huge and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffective and short-lived. Central banks are becoming less and less inclined to intervene to manipulate market prices.

.Leverage. In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make extraordinary profits and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.



• Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer free 'Demo' accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for “poor” traders who would like to hone their trading skills with 'virtual' money before opening a live trading account.

• 'Mini' Trading: You would think that getting started as a currency trader would cost a lot of money. The fact is, it doesn't. Online Forex brokers offer "mini" trading accounts with a minimum account deposit of $300. This makes Forex much more accessible to the average individual who doesn't have a lot of start-up trading capital.