Switch To Forex!

Why would you want to give up trading stocks or futures and trade the Forex?

After all, isn’t the Forex a much more risky market? 

Well, first of all many things in life are risky if done ill prepared. The Forex certainly is no exception. And yes, the Forex might present a potentially higher risk than trading other markets. However, therein is also its great potential.

Liquidity! The Forex is a very large and hence liquid market. For the small retail trader this means fast execution – no problems getting into a trade or getting out of a trade (this may not be totally the case if you choose to trade one of the less liquid currency crosses!).

Leverage! The Forex provides greater leverage – 100/1. But remember, leverage works both ways; it can work for you or against you!

Accessibility! The Forex market is a 24-hour market. While this statement is correct, most market maker/brokers (the business that provides you access to the Forex) will be closed for some time during the weekend. However, you have access to this market 24 hours a day at least for 5 to 6 days of the week (depending on your broker)!

Commission Free! Most Forex brokers do not charge the traditional commissions typical with stocks and other markets. Your broker makes his/her money on the point difference between the currencies at the time a trade is placed. Most currencies have a point/pip differential (the spread) anywhere between 2 to 8 pips.

Low Startup! It takes less of your dollars to start a trading account and to maintain that account. Again, this can work for or against you!

Great trending markets! The Forex market trends extremely well, much of the time, much more so than other markets. Hence, this market lends itself to use pure technical analysis (if that’s what you like).

By now do you think you might be interested to find out more about this opportunity? Or do you think that at minimum the Forex deserves your consideration?

(C)2006 SwitchToForex

Forex or FX, stands for foreign exchange. It is the largest financial market in the world today, trading at a daily volume close to $ 2 trillion and is expected to grow! You may also hear terms like spot or cash market which refer to the same: the forex market.

Who are the players in this market? The forex is made up of a number of participants: large global banks, central banks setting monetary policy for the respective country, large investment companies and of course speculators, amongst them the small retail trader (you guessed it - you and I!).

Where is the forex located? Well, the forex isn’t a physical market. There is no physical location, no building housing the central exchange. The forex is a global electronic market linking together banks, businesses, investment firms and retail traders via computers. You see, the forex really is made possible by technology, allowing even the smallest of trader to participate in this huge opportunity.

Is the forex just pure speculation? While there is much speculation in the forex, worldwide there is also a real need for currencies to be exchanged on a daily basis. Look at the following examples.

A US business sells products overseas. The company needs to exchange the foreign currency it received as profit for dollars.

You go on a trip around the world. You need to exchange US Dollars for the currencies of the countries you expect to spend the bulk of your time. Upon your return you exchange any foreign currency not spent back to dollars.

A global company purchases parts from foreign suppliers and pays for the products in local currency. The same company sells products all over the world and hence needs to exchange multiple currencies on an ongoing basis.

You get the idea, right? Note that much of this ongoing exchange involves the US Dollar!

©2006 SwitchToForex