"how To" Start Trading The Forex Market? ( Part 2)
By Martin Maier, Thu Dec 8th
Why is FOREX trading so popular?
Because you can trade from anywhere. From your kitchen table,bedroom, garage or from the nearest Starbucks coffeehouse ( mostof them have wireless Internet connection).
If you have or like to travel, take your laptop with you and youcan trade the FOREX anywhere in the world where you have anInternet connection.
When you want to start trading the Forex Market nobody is askingyou for a diploma, a formal license or a proof of how many hoursyou have spent studying the Foreign Exchange Market and/orBanking Industry.
FOREX Trading is Economical and Start-up Costs are Low! You canopen an account to trade Forex with as little as US$ 200 at hemost brokerage firms. I personally do recommend Fenix CapitalManagement, LLC, which offers a state of art Trading platform,that allows you to place orders directly by clicking on thechart.
The Main Benefits of Trading the FX Spot Market are:
YOU don't pay commissions or fees! YOU can trade 24-hours a day! YOU can trade up to 400:1 Leverage ! YOU can have FREEStreaming executable Price quotes and live charts!
It is important to know the differences between cash FOREX (SPOTFX) and currency futures.
In currency futures, the contract size is predetermined.
With FOREX (SPOT FX), you may trade electronically any desiredamount, up to $10 Million USD.
The futures market closes at the end of the business day(similar to the stock market).If important data is releasedoverseas while the U.S. futures markets is closed, the nextday's opening might sustain large gaps with potential for largelosses if thedirection of the move is against your position.
The Spot FOREX market runs continuously on a 24-hour basis from7:00 am New Zealand time Monday morning to 5:00 pm New York TimeFriday evening.
Dealers in every major FX trading center (Sydney, Tokyo, HongKong/Singapore, London, Geneva and New York/Toronto) ensure asmooth transaction
as liquidity migrates from one time zone tothe next.
Furthermore, currency futures trade in non-USD denominatedcurrency amounts only, whereas in spot FOREX, an investor cantrade in almost any currency denomination, or in the moreconventionally quoted USD amounts.
The currency futures pit, even during Regular IMM (InternationalMoney Market) hours suffers from sporadic lulls in liquidity andconstant price gaps.
The spot FOREX market offers constant liquidity and market depthmuch more consistently than Futures.
With IMM futures one is limited in the currency pairs he cantrade. Most currency futures are traded only versus the USD.
With spot FOREX, you may trade foreign currencies vs. USD or vs.each other on a 'cross' basis, for example: EUR/JPY, GBP/JPY,CHF/JPY, EUR/GBP and AUD/NZD
More and more well informed investor and entrepreneurs arediversifying their traditional investments like stocks, bonds &commodities with foreign currency because of the followingreasons: (will be continued)
Risks of currency trading: Margined currency trading is anextremely risky form of investment and is only suitable forindividuals and institutions capable of handling the potentiallosses it entails. An account with an broker allows you to tradeforeign currencies on a highly leveraged basis (up to about 400times your account equity). The funds in an account that istrading at maximum leverage may be completely lost if theposition(s) held in the account experiences even a one percentswing in value, given the possibility of losing one's entireinvestment. Speculation in the foreign exchange market shouldonly be conducted with risk capital funds that, if lost, willnot significantly affect the investors financial well-being.
About the author:Veteran Trader Martin Maier Founder of Fenix Capital Management,LLC http://www.fenixcapitalmanagement.com He is the developer ofvarious futures and commodities trading programs and his systemshave been ranked and rated by various large American InvestmentProfile Rating Companies such as STAR and MAR
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