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WHY WOULD YOU TRADE THE FOREX?

There are several advantages and benefits of trading the Forex market.   Traders across the globe are discovering the new skill of trading in the non-exchange FX market.  Take some time to research some of the advantages of the world’s largest market below:

24 Hr Access
 
The Forex market never rests. It opens every Sunday at 4 PM EST to its close every Friday at 4 PM EST. The world’s first true global marketplace, almost alwaysopen for trading. When we wake up, Sydney andHong Kong are going to sleep, then Frankfurt, Londonand back to the East Coast of USA in New York. This market is excellent for those traders whowant to trade it part time because its their choice which time of day suitstheir needs best, unlike other markets. 

Liquidity
 
With $3.2 trillion changing hands every day, the Forex market is extremelyliquid. Whether it is 12PM or 12AM, there are always traders willing to buy andsell foreign currencies.   With the click of a mouse you can buy or sell any currency pair.
 
Leverage
Investors are able to trade currency pairs on a highly leveraged basis – up to 200 times their investment. For example, an investmentof $250 would allow a trader to control up to $100,000 of any particularcurrency. Leverage allows the trader to increase their position in the marketplace, however the high degree of leverage can work against you as well as for you.  Leverage that is high may lead to large gains as well as large losses.
 
Forex Market provides an alternative to trade financial markets. (buyersand sellers market)

Currencies trade in ISO pairs; a country’s currency has value that isrelative to the currency of another country. The most popular currency pair isthe EUR/USD pair, followed by the GBP/USD pair. When you go long (buy) the GBP/USD,you are buying the Pound as you simultaneously sell the US Dollar. When you goshort (sell) the GBP/USD, you sell the Pound as you simultaneously buy the USDollar.    It is just as simple to trade mechanically byeither selling or buying.   You have the opportunityto profit or lose either way.

Low Transactional Costs

The Forex market is the most cost efficient market to trade.   Exchange fees are non existent due to thefact that the Forex is only traded online and not in a fixed location. The onlyfees you pay are spreads: the difference between the bid and asked price forthe currency pair. The spread cost can be as low as 1-2 pips.
 
Low Account Minimums

Individuals can open a live trading account with as little as $250 dependantupon their broker (FDM) of choice.

FREE ‘Demo’ Trading Accounts

Most Forex brokers will allow you to open a free ‘demo’ trading account. A‘demo’ account works just like a ‘live’ account except that you do not depositany money into the account. The broker funds the account with ‘demo’ or playmoney. This is a smart way if you are new to the market to get the mechanics oftrading down before you ever put any of your own risk capital at play in themarket.

 

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.