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The Many Advantages Of trading The Forex Market

Jun 14, 2008
The FOREX cash/spot market is a unique investment opportunity that offers traders the opportunity to profit regardless of market cycles or economic conditions. This article will teach you about some of the useful features of the FOREX market, and show you how you can use them to maximize your profits.

The FOREX market is accessible to investors all twenty four hours of every day of the year. Unlike the New York Stock Exchange, the FOREX market never closes. This means that investors have the ability to access and take advantage of the market's cycles at any given time.

A trader in FOREX can make any move they need to, into or out of the market, in all types of market conditions because the FOREX is the world's most liquid market. Trading is non-stop, with minimal execution barriers or risk and with no limit on daily trading.

With FOREX, traders can expect a leverage ratio of up to 400, while a leverage ratio of only 2 is common in the equity markets. This means that traders need to exercise some caution, since the risk of loss in a downside can be much greater than in the equity markets. At the same time, the potential for profit on the upside cycle is greatly increased, thus offering traders the potential to maximize their earnings.

The costs per transaction are very low. The retail transaction price is actually lower than 0.1% under typical conditions. That's just one tenth of one percent. At larger dealers, the spread may be below five pips, and may expand by a large amount when the market is moving quickly.

When you trade on the FOREX you always have a good market because you are selling or buying one currency in relation to another. Each currency can have a bull or bear market depending on how it is doing against other currencies so you always have the potential for a profit.

The FOREX market is an inter-bank market. The FOREX market is a global one, consisting of a world wide network of dealers who communicate with their customers electronically or by phone. Unlike the equity markets which has the New York Stock Exchange, there is no central location for the FOREX market.

Given the large, decentralized nature of the FOREX, no one institution, not even a national bank, much less a single trader, can corner the market or control market prices for an inordinate length of time.

Because major FOREX players, such as commercial banks, are governed and regulated by banking laws and regulations, you do not have to fear that trading FOREX means playing in a completely unregulated market.

All of these factors make the FOREX a great bet for any individual willing to try it. The gross potential is much higher when you are in a wide open market that offers the advantages that FOREX trading does.
About the Author
Uncover the latest Forex Trading Software tips, tricks, and techniques at Forex Examiner. Get the inside scoop with our complimentary Forex trading ebook. Get your free copy at http://www.ForexExaminer.com now.
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