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"How To" Start Trading The Forex Market? (part 3)

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10 REASONS TO START TRADING FOREX! More and more well informed investor and entrepreneurs arediversifying their traditional investments like stocks, bonds &commodities with foreign currency because of the followingreasons: 1) FOREX is the largest financial market in the world. With a daily trading volume of over $1.5 trillion, the spotFOREX market can absorb trading sizes that dwarf the capacity ofany other market. In fact, when compared with the $50 billiondaily market for equities or the $30 billion futures market, itbecomes quickly apparent this gives you, and millions of otherFOREX traders, almost infinite trading liquidity and flexibility. 2) FOREX is a True 24-hour market. The FOREX Market never sleeps. Trading positions can be enteredand exited at any moment around the globe, around the clock, 5.5days a week. There is no waiting for an opening bell as in thecase of trading stocks. It is a 24- hour, continuous electronic(ONLINE) currency exchange that never closes. This is verydesirable for you if you want to trade on a part-time basis,because you can choose when you want to trade: morning, noon ornight. 3) There is never a Bear Market in FOREX. You can have access to a seamless exchange of currencies.Currencies trade in "pairs" (for example, US dollar vs. JPY(YEN) or US dollar vs. CHF (Swiss franc), one side of everycurrency pair (for example, USD/CHF) is constantly moving inrelation to the other. Thus, when you buy a particular currency,you are actually simultaneously selling the other currency inthat particular pair. As the market moves, one of the currencieswill increase in value versus the other. Of course, it is up toyou to choose the correct currency to be long ( you bought) orshort( you sold). 4) High Leverage - up to 400:1 Leverage. You are permitted to trade foreign currencies on a highlyleveraged basis - up to 400 times your investment with FenixCapital Management, LLC and with some other brokers. Standard 100,000- US$ currency lots can be traded with as littleas 0.25% margin, or $250. Mini FX accounts are permitted to trade with just 0.25% margin,meaning, just $25 allows you to control a 10,000-unit currencyposition. Futures traders, who are accustomed to margin requirementsgenerally equal to 5-7%-8% of the contract value, willimmediately recognize that the FOREX market provides muchgreater leverage, and for stock traders, who must post at least50% margin, there's no comparison. If you're looking for anefficient use of trading , trade the Forex Market. 5) Price Movements might be Highly Predictable. Currency prices in the FX market generally repeat themselves inrelatively predictable cycles, creating trends. The strongtrends that foreign currencies develop are a significantadvantage for traders who use the "technical" methods andstrategies. Unlike stocks, currencies have the tendency todevelop strong trends. Over 80% of volume is speculative innature and, as a result, the market frequently overshoots andthen corrects itself. As a technically-trained trader, you caneasily identify new trends and breakouts, to enter

and exitpositions. 6) YOU don't pay commissions or fees to trade FOREX When you trade FOREX, through Fenix Capital Management LLC (FCM)you can do it totally FREE of commissions and fees , regardlessof your account size. Fenix Capital Management LLC, requires a very low minimum amountto open a brokerage account, only US$ 200 and they do not chargecommissions or fees to trade or to maintain an account,regardless of your account balance or trading volume. 7) YOU don't have to pay trading fees or exchange fees. There are none of the usual fees, which futures and equitytraders are accustomed to pay: NO exchange or clearing fees, NO NFA or SEC fees. Because currencies trade over-the-counter (OTC), via a globalelectronic network, in FOREX, what you see on your tradingscreen, is what you get, allowing you to make quick decisions onyour trades without having to worry or account for fees that mayaffect your profit/loss or slippage. In the equity and commodity markets, you must pay both acommission and exchange fees. The over-the-counter structure ofthe FX market eliminates exchange and clearing fees, which inturn lowers transaction costs. 8) HOW to Forex brokers make money if they don't chargecommissions? Like all traded financial products, over-the-counter currencytrading involves a bid/ask spread, which represents the pricesat which your counterpart is willing to trade. Your broker willreceive a part of this bid/ask spread. 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 andtypically receive wider trading spreads, especially duringafter-hours trading. 9) Market Transparency. Market transparency is highly desired in any tradingenvironment. The greater the market transparency, the moreefficient the market becomes. Unlike other markets wheretransparency is compromised (like in the many recent scandals),FOREX markets are highly transparent (i.e., analyzing countries,and having access to real-time research / news, is easier thananalyzing companies). Because of this transparency, as an FX trader, you will be ableto apply risk management strategies in accordance to yourfundamental and technical indicators. 10) Instantaneous Order Execution The FX market offers the highest level of market transparencyout of all the financial markets. Because of this, orderexecution and fill confirmation usually occur in just 1-2seconds. In Forex, order execution is all-electronic and because you'llbe trading via an Internet-based platform, instantaneousexecution is routine. There are no exchanges, no traditional open-outcry pits, nofloor brokers, and consequently, no delays.( will be continued ) About the author: Veteran Trader Martin Maier is the Founder of Fenix CapitalManagement, LLC, http://www.fenixcapitalmanagement.com. He isthe developer of various futures and commodities tradingprograms and his systems have been ranked and rated by variouslarge American Investment Profile Rating Companies such as STARand MAR.

Written by: Martin Maier

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