More and more well informed investor and entrepreneurs are
diversifying their traditional investments like stocks, bonds &
commodities with foreign currency because of the following
1) FOREX is the largest financial market in the world.
With a daily trading volume of over $1.5 trillion, the spot
FOREX market can absorb trading sizes that dwarf the capacity of
any other market. In fact, when compared with the $50 billion
daily market for equities or the $30 billion futures market, it
becomes quickly apparent this gives you, and millions of other
FOREX traders, almost infinite trading liquidity and flexibility.
2) FOREX is a True 24-hour market.
The FOREX Market never sleeps. Trading positions can be entered
and exited at any moment around the globe, around the clock, 5.5
days a week. There is no waiting for an opening bell as in the
case of trading stocks. It is a 24- hour, continuous electronic
(ONLINE) currency exchange that never closes. This is very
desirable for you if you want to trade on a part-time basis,
because you can choose when you want to trade: morning, noon or
3) There is never a Bear Market in FOREX.
You can have access to a seamless exchange of currencies.
Currencies trade in "pairs" (for example, US dollar vs. JPY
(YEN) or US dollar vs. CHF (Swiss franc), one side of every
currency pair (for example, USD/CHF) is constantly moving in
relation to the other. Thus, when you buy a particular currency,
you are actually simultaneously selling the other currency in
that particular pair. As the market moves, one of the currencies
will increase in value versus the other. Of course, it is up to
you to choose the correct currency to be long ( you bought) or
short( you sold).
4) High Leverage - up to 400:1 Leverage.
You are permitted to trade foreign currencies on a highly
leveraged basis - up to 400 times your investment with Fenix
Capital Management, LLC and with some other brokers.
Standard 100,000- US$ currency lots can be traded with as little
as 0.25% margin, or $250.
Mini FX accounts are permitted to trade with just 0.25% margin,
meaning, just $25 allows you to control a 10,000-unit currency
Futures traders, who are accustomed to margin requirements
generally equal to 5-7%-8% of the contract value, will
immediately recognize that the FOREX market provides much
greater leverage, and for stock traders, who must post at least
50% margin, there's no comparison. If you're looking for an
efficient use of trading , trade the Forex Market.
5) Price Movements might be Highly Predictable.
Currency prices in the FX market generally repeat themselves in
relatively predictable cycles, creating trends. The strong
trends that foreign currencies develop are a significant
advantage for traders who use the "technical" methods and
strategies. Unlike stocks, currencies have the tendency to
develop strong trends. Over 80% of volume is speculative in
nature and, as a result, the market frequently overshoots and
then corrects itself. As a technically-trained trader, you can
easily identify new trends and breakouts, to enter and
6) YOU don't pay commissions or fees to trade FOREX
When you trade FOREX, through Fenix Capital Management LLC (FCM)
you can do it totally FREE of commissions and fees , regardless
of your account size.
Fenix Capital Management LLC, requires a very low minimum amount
to open a brokerage account, only US$ 200 and they do not charge
commissions 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 equity
traders are accustomed to pay:
NO exchange or clearing fees, NO NFA or SEC fees.
Because currencies trade over-the-counter (OTC), via a global
electronic network, in FOREX, what you see on your trading
screen, is what you get, allowing you to make quick decisions on
your trades without having to worry or account for fees that may
affect your profit/loss or slippage.
In the equity and commodity markets, you must pay both a
commission and exchange fees. The over-the-counter structure of
the FX market eliminates exchange and clearing fees, which in
turn lowers transaction costs.
8) HOW to Forex brokers make money if they don't charge
Like all traded financial products, over-the-counter currency
trading involves a bid/ask spread, which represents the prices
at which your counterpart is willing to trade. Your broker will
receive 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 and
typically receive wider trading spreads, especially during
9) Market Transparency.
Market transparency is highly desired in any trading
environment. The greater the market transparency, the more
efficient the market becomes. Unlike other markets where
transparency 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 than
Because of this transparency, as an FX trader, you will be able
to apply risk management strategies in accordance to your
fundamental and technical indicators.
10) Instantaneous Order Execution
The FX market offers the highest level of market transparency
out of all the financial markets. Because of this, order
execution and fill confirmation usually occur in just 1-2
In Forex, order execution is all-electronic and because you'll
be trading via an Internet-based platform, instantaneous
execution is routine.
There are no exchanges, no traditional open-outcry pits, no
floor brokers, and consequently, no delays.( will be continued )
About the author:
Veteran Trader Martin Maier is the Founder of Fenix Capital
Management, LLC, http://www.fenixcapitalmanagement.com. He is
the developer of various futures and commodities trading
programs and his systems have been ranked and rated by various
large American Investment Profile Rating Companies such as STAR
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Risk Disclosure: 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 / trade 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.
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