Advantages of Trading Forex

The following are some of the advantages of Forex Trading over other forms of Currency Trading;

. Speed of execution
The speed of execution is within the twinkling of an eye. Usually less than 8 seconds, depending on your internet connection.

. High liquidity
The daily turnover is in excess of $US 1.9 trillion, so much money is available to go round.

. Available for 24 hours round the clock on week days
The market runs non-stop from 22:00 HRS GMT on Sunday to 20:00 HRS GMT on Friday. So you choose when to trade. Absolute liberty you may say.

. No commissions
You don’t pay any commission for trades placed. Rather, the trade stations make money from the spread i.e. difference between bid and ask price.

. Market transparency
There are no shady transactions. You choose which currency pair to buy, no middleman involved! No Stockbroker.

. Two way profitability
Irrespective of the trend of the market, either an uptrend or a downtrend, you make money depending on the position you take.

. High leverage
The leverage available in Forex trading enables you to trade high volumes with a little amount of money. For instance a mini Forex account is worth $10,000 but leverage allows you to trade this account with as low as $100!

. Market Orders
This allows you to set where you want to take your profit. You can do this and just walk away from your computer.


Myths About Forex Trading

I will like to disprove the following myths about Forex trading:

1. Forex is a Get Rich Quick Scheme

Forex is not a get-rich-quick thing. As a matter of fact, it is like every other business that has to be built over time. Many people start trading with the notion that they want to turn $500 to $50,000 overnight. This kind of mindset can result in huge losses because you will use unnecessarily high leverage. (We will dwell on this much later)

2. Forex cannot be traded by everybody

This is far from the truth. Forex market is open to all willing traders irrespective of race or country.


3. Forex trading requires huge capital

This is another lie. As a matter of fact, some brokers allow you to start trading micro accounts with as low as $US 100. Even if your broker allows you to trade with this amount, I will not advise you go that low. At least $US 500 will be okay to get started. Remember you are trading to make money not to lose it.