There are many different instead of futures or stocks. The advantages are what makes this type of trading so popular. These advantages are where you will find the greatest comfort in trading Forex and they are:

1. Lower Margin
Just like with futures and stock speculation, a forex trader has the ability to control a large amount of the currency basically by putting up a small amount of margin. However, the margin needs for trading futures are usually around 5% of the full value of the holding.

What this means is that trading forex, a currency trader’s money can play with 5-times as much value of product as a futures trader’s, or 50 times more than a stock trader’s.
When you are trading on margin, this can be a very profitable way to create an investment strategy, but it’s important that you take the time to understand the risks that are involved as well.

2. No Commission and No Exchange Fees
When you trade in futures, you have to pay exchange and brokerage fees. Trading forex has the advantage of being commission free. This is far better for you. Currency Trading is a worldwide inter-bank market that lets buyers to be matched with sellers in an instant.
You are going to have to compare both online forex and your specific futures commission charge to see which commission is the bigger one.
 
3. Limited Risk
When you are trading futures, your risk can be unlimited. For example, if you thought that the prices for orange juice were going to continue their upward trend, just before the Florida Hurricanes. The price for it after that fell dramatically, which moved the limit down several days in a row. You would not have been able to leave your position and this could have wiped out the entire equity in your account as a result. Because the price just kept on falling, you would have been obligated to find even more money to make up the deficit in your account.

4. Position Rollover
When futures contracts expire, you have to plan ahead if you are going to rollover your trades. Forex positions expire every two days and you need to rollover each trade just so that you can stay in your position.

5. 24-Hour Marketplace
With futures, you are generally limited to trading only during the few hours that each market is open in any one day. Forex, on the other hand, is a 24/5 market. The day begins in New York, and follows the sun around the globe through Europe, Asia, Australasia and back to the US again. You can trade any time you like Monday-Friday.

6. Free market place
Foreign exchange is perhaps the largest market in the world with an average daily volume of US$1.4 trillion. That is 46 times as large as all the futures markets put together! With the huge number of people trading forex around the globe, it is very hard for even governments to control the price of their own currency.

There are a lot of forex trading software online available which can make you a lot money. Take just the right one.

Mirko van Anken
http://www.articlesbase.com/currency-trading-articles/the-advantages-of-forex-trading-728206.html

Posted December 22nd, 2009 by admin 4 Comments » This entry was posted on Tuesday, December 22nd, 2009 at 1:33 am and is filed under Futures Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “The Advantages of Forex Trading”

  1. Sisyphus Says:

    What are the advantages of trading in ForEX rather than stocks?

  2. www.BrienPrivateFinance.com Says:

    Its just a different security. It has to do with what you like to do, and how much you know about each of them. Many of the big time investors used to deal more with stocks, so it was easier to get into the forex market to make money (as you weren’t competing against other top investors), but with the stock market the way it is right now, that is starting to change.
    References :

  3. Xelam Says:

    sisyphus,

    the following are some of the reasons i could share with you why trading forex is advantageous compared to stocks;
    *forex is traded 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT)
    *liquidity – there are always buyers and sellers to trade with
    *forex is often traded without commissions which makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
    *leveraging – with a minimum account of USD 10,000, for example, you can trade up to USD 500,000.
    *profit potential- there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency.

    for more info, you may check this site and register to download a Free Forex Ebook and a Free $50k Practice account as well. all the best.

    References :
    http://www.optionforex.org

  4. who m Says:

    the major advantage is the time. If you are planning on getting into generating a forex income part time, it affords you to test the waters after your work hours and on week ends.
    References :
    http://www.forexincomeplan.com/mini-forex-trading-how-much-money-to-start

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