Six advantages that excels by Forex Trading on other investments
There are many characteristics that make Forex Trading preferable to trade stocks or futures, such as:
Just like speculating on stocks, futures, forex, the trader has the ability to control a large amount of money once you provide a small amount of margin. Nevertheless, the margin requirements in futures trading range around 5% of the total contract value or 50% of the total value of shares, while the margin requirements in the forex may range from about 1%. For example, the margin required to trade each contract worth $ 100,000 is $ 1,000 only. This means that with forex trading, the currency trader can play about five times that of the product that have dealt with as a trader of futures contracts or fifty times as a trader for the value of the shares. When using margin trading, this may be a profitable way to make an investment strategy, but it is important to take the time to understand the risks that are also included in this. You must ensure that you fully understand how the margin account. So it’s better to be sure you read the agreement concluded between you and your clearing firm that handled the margin. Talk to your account manager may also wish if you want to ask any questions related to this.
Trading positions that you open in your account could be liquidated in whole or in part if the decline in available margin in your account without a predetermined level, but may not actually get a margin call before liquidate your trading centers. That’s why you have to keep the balance of margin on an ongoing basis and also use stop-loss per trade center open it in order to curb the downside risks orders.
2. no commission and no exchange fees
When trading futures, you must pay a fee for mediation and swap services. Forex Trading advantage of being free from the commission which is very useful for you. Currency trading is Antrpenneka global market allows buyers and sellers to deal with immediate effect.
Although you do not have to pay a commission to the broker even allows you to complete the transactions, the Alasebred usually be larger than in the futures market. For example, if you are trading in the dollar yen pair may find that Alasebred in Forex trading up 3 points (worth $ 30). While when trading futures, the Japanese Alasebred for Lin will be up to one point (worth $ 10), but will also pay a commission to the broker fees above this. This commission could range from $ 10 in the case of basic services as a commission of up to $ 50 if you get the integrated trading services. Yet the true cost when calculated must be inclusive of all these things. You will have to compare the commissions to be paid to trade Forex on the Internet and among futures to see what is the area that will hold you greater cost.
3. limited risk and a guaranteed stop orders
When trading in the futures contracts, the your risk may not be limited. For example, you may have thought that the live cattle prices will continue an upward trend in December, the first in 2003, before the outbreak of mad cow disease in US cattle. This led to a decline in livestock prices dramatically prompting prices to retreat on a regular basis for several days. In this case you may not be to have the ability to get out of the trade center and therefore this situation may lead to a full account balance survey. Most of it in the event of continued price decline may be forced to find more money to compensate for the deficit in your trading account.
4. rotate trading centers
At the end of the validity of the futures, you must plan as if you will rotate your transactions. Forex trading centers expire every two days and you can rotate each deal once he let them open.
5. The market operates 24 hours a day
With futures, you will be limited to trade only in a few hours when the market opens each day. If they were any significant news when the markets are closed, you will not find a way to take advantage of this before the re-opening of the market, which could be several hours later. On the contrary, we find that the Forex market is open 24 hours a day, five days a week. Trading begins in New York and then track the movement of the sun around the world, from Europe and even Asia and Australia before returning to the United States again. You can trade any time you want between Monday and Friday.
6. Market enjoys freedom
Forex Trading is perhaps the largest financial market in the world with an average daily trading about $ 1.4 trillion per day. This value represents 46 twice the value of trading of all futures markets combined! With the presence of this huge number of individuals who trade currencies around the world, it would be very difficult even on the governments to control the price of its currency.