5 Reasons For Becoming A World Currency Trader

The foreign currency exchange market offers today's investor many advantages and here are just reasons why you might want to become a world currency trader.

A Market Which Never Closes

Many of the trading markets around the world are situated in fixed locations and operate within strict trading hours, often limited to just five or six hours a day between Monday and Friday. The Forex market however is open 24 hours a day.

This means that traders can not only take advantage of international events and react literally as they happen, but they also have the ability set their own trading hours. If you prefer to work in the mornings then that's fine but, if this doesn't suit you, then you can choose to trade during the afternoon, late evening or even in the middle of the night if you want to.

Low Trading Costs

In many markets, like the equity market, traders not only have to pay a spread (the difference in price between buying and selling a stock) but also have to pay a commission to the broker. On small trades this commission can typically be about $20 and this can rise rapidly to over $100 for larger trades.

Because the foreign currency exchange market is a wholly electronic market many of the traditional trading costs are eliminated and you are in affect reduced to paying nothing more than the spread. In addition, the extremely liquid nature of the global currency exchange market means that spreads are normally much tighter than those seen in other markets.

The Ability To Trade On High Leverage

In most markets where a trader has an opportunity to trade on leverage the leverage offered is often quite low. In the case of equity markets, for example, professional equity day traders will normally operate on a leverage of about ten times their capital. In the Forex market by contrast it is quite common to find that traders are permitted to trade at one hundred to two hundred times their capital.

A downside of high leverage is that it can of course lead to high losses as well as high gains. However, within the foreign currency market, risk management is extremely tightly controlled.

Limited Slippage

In currency trading trades are executed immediately using real-time prices at which firms will buy or sell the currencies quoted. In almost all cases this means that the price you see and the price you pay are the same.

This is not often the case in other markets where there can be often considerable delays between placing an order and that order being executed during which time the price will often move against you.

The Chance To Profit In Both Rising And Falling Markets.

Equity markets follow rising and falling trends (cycling between Bull and Bear markets), but the Forex market does not suffer this cycling which comes from structural bias in the market.

World currency trading always involves two currencies so that if you are down on one currency then you are up on the other. There is therefore always the potential for making a profit whether the market is rising or falling.

US dollar mildly lower as markets eye retail data - Channel News Asia
11 Mar 2010 at 6:32pm

Reuters
US dollar mildly lower as markets eye retail data
Channel News Asia
The dollar, meanwhile, was mostly flat against the Japanese currency, at 90.48 yen from 90.49 a day earlier. The volatility in dollar-euro trading had eased ...
WORLD FOREX: Dollar Weakens Slightly On Euro After Trade DataWall Street Journal
Forex Trading in 2010: Like the Eq...
Dollar Dominance Gets a Warning - Wall Street Journal
10 Mar 2010 at 11:04pm

Dollar Dominance Gets a Warning
Wall Street Journal
Barclays plans to start trading operations in Switzerland and is hiring Swiss franc currency traders, people familiar with the situation said. ...

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US DOLLAR FALLS AS DEMAND FOR RISK SURGES - ForexTV.com
11 Mar 2010 at 5:32pm

Reuters
US DOLLAR FALLS AS DEMAND FOR RISK SURGES
ForexTV.com
Technically, this currency is trading in a range. A support base is being built which suggests an impending rally, but this market needs a catalyst to drive ...
Traders Fear Chinese 'Bubbles'Before It's News
Higher-Yielding Currencies Mounting ComebackistockAnalyst.com (press release)

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