Benefits of Trading Forex. By Dr. Ned Gandevani
Forex trading offers many great benefits that could help achieve your financial independence. With about $1.9 – 2 trillion market size, this market is the biggest trading market across the globe. Let us review the key benefits that the Forex market could provide for you.
Virtual office
With the advent of technology and the internet, you could literally trade from anywhere you wish. Just get your internet access, and your virtual office is ready for you to trade. This means you do not have to commute long hours in heavy traffic, stay home and enjoy your family. If you are not feeling well, you do not have to go through all the trouble to convince your boss that you cannot go to work that day. Perhaps the greatest benefit to trading the currency markets is the ability to trade anywhere in the world. This in itself is something that most people desire.
24-hour Trading
Forex is the only true 24-hour market. This makes it perfect for traders who reside in different parts of the US with different time zones. Furthermore, if you live outside the US, you don’t have to wake up at obscure hours to trade your favorite currency. This also allows traders to set their own office hours. Having a 24-hour trading activity can also be of great benefit for traders who have problem sleeping at night.
The Forex market begins each day in Sydney, Australia and unfolds around the globe as each financial centers open for trading. It moves around beginning in Sydney to Tokyo, London and then New York. For that, you are able to respond and trade your favorite currencies based on different exogenous factors. Forex is a true 24-hour trading market that you can utilize for profitable trading.
Liquid Market
With the daily trading volume of about $2 trillion, one cannot find a more liquid market. The amazing volume of the Forex market keeps prices stable, thus helping reduce the gap between bids and ask. This ensures that traders get a fair marker value. High liquidity also affirms that you never have to wait for more than seconds to find a buyer or seller for your currency positions.
High Leverage Purchasing Power
Among the chief factors in succeeding at any business endeavors is the ability to use leverage, hence to increase your purchasing power. Many Forex brokers offer up to 100 to 200:1 leverage. This is much higher that the typical 2:1 leverage offered by equity brokers.
No Commission for Spot Trading
There is no commission charge for trading the Forex market. This is due to the fact that the broker pockets the difference between the bid and ask or the spreads. Suppose you decide to buy USD/JPY at that moment quote reads bid for 117.75 and ask 117.80. This means you pay the ask price and when you decide to sell, you receive the bid price. Better brokers would have about 2-4 PIPs in spread. PIP stands for Price Interest Point and indicates the minimum move or tick on a currency pair.
However, if you decide to trade Currency futures you’ll pay commissions for buying and selling each currency pair contact. This extra cost for commission could provide you better pricing.
Short-Selling without an Up tick
One of the good features of trading the Forex market is that you do not need to have an up tick before you could take a short position. However, for equities, you would require an up tick to short a stock. This is due to the fact that when you trade currency pairs, in reality you buy one and sell the other; therefore there is no specific bias on the market. Conversely, currency trading is not a zero sum game; your loss does not mean a profit for others.
The Forex market could present wonderful opportunities for you to pursue your financial goals. The Winning Edge Forex System provides you a cutting edge trading system to reach your goals.
