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Highly
Trending markets
Because the foreign exchange market gaps are very limited (the market is closed
briefly on weekends), it's not dramatically affected by buying programs that
allow it to be easily manipulated. The forex market offers some of the smoothest
trends available in any market. No other market can come close to the amount
of monetary volume and participation as the forex market making it a haven
for traders not having to deal with gaps and price movements, erratic spikes
and other choppy market conditions more commonly experienced in the lower
volume markets, like futures or options.
Commission
free trading
Though some speculators are unaware, all financial markets have a spread (the
difference between the bid and ask price). In the futures market you are not
only paying the spread, but you are also paying commission charges, clearing
and exchange fees on top of the spread. Ticker prices in the futures market
typically signify the last traded price, not the spread. Global Forex Trading
offers you commission-free* trading on tradable prices. In a sense, what you
see is what you get, allowing you to make quick decisions on your forex trades
without having to account for fees that may affect your profit/loss or slippage
between the price you have just seen on the ticker and the price upon which
the order will be filled.
Better
Leverage
Trading in the spot currency markets provides advantages over trading currency
futures contracts. One of the main advantages for traders trading spot currencies
is the margin rate or leverage that clients are given. In spot currency trading,
customers receive one low margin rate for trades done 24 hours a day. In currency
futures trading, the client has one margin rate for "day" trades
and one margin rate for "overnight" positions. This can become a
hassle for traders and decreases the overall tradability of the currency futures
markets. Margin rates in spot currency trading vary from around 1 to 5 percent
depending on the size of transactions a particular trader initiates. Global
Forex Trading's spot currency trading gives the customer one rate all the
time, no hassles and no margin calls. One rate so that the trader can manage
their own risk efficiently and simply. Leverage is a double-edged sword. Without
proper risk management, this high degree of leverage can lead to large losses
as well as gains.
24-hour
Trading
Since the forex market, in a sense, follows the sun around the globe the market,
it rarely experiences periods of illiquidity. What this means is that any
trader in any time zone can trade forex at any time during the day or night.
You no longer have to wait for the market to open when news has already hit
the streets or have to stop trading because the CME, CBOT or other American
futures pits have closed for the day. This gives the forex trader added flexibility
and continuous market opportunities that just aren't available in futures.
To explain the global effect on the forex market, there are three main economic zones that are linked throughout the world. For instance, when the Pacific Rim markets such as Japan and Singapore begin to slow, the European markets of England, Switzerland and Germany begin. These forex markets are followed by the North American markets of the United States, Canada and Mexico. As the North American markets begin to slow down for the evening, the Pacific Rim starts their trading day again. This example shows that you are no longer limited to trading using a comparatively short, trading day offered by U.S. markets only.
Foreign exchange is one of the few true 24-hour markets. We believe that when trading forex, clients enjoy unparalleled liquidity 24 hours a day. In many futures markets, however, the overnight access available to traders is simply window dressing. The lack of liquidity and restrictions on what types of orders a client can place make trading and protecting positions a nightmare.
A good example is the Globex market. While the Globex market is only closed for a 15 minute period each day, the liquidity available after the open outcry market is closed in Chicago is normally very low. Spreads are wider and the ability to place larger orders is non-existent. Because of this, most volume traders are forced into trading the exchange for physical market overnight. The EFP market is the spot market priced in futures pricing. EFP's, however, come with additional fees and are not available from an electronic interface. Electronic access, speed, no fees and unmatched liquidity, 24-hours-a-day makes spot forex the choice for the foreign currency trader.
Forex
Methodology
Foreign exchange is the principal market of the world. If you study any market
trading through the civilized world everything is valued in money, the root
of all pricing. Global finance is the distribution and redistribution of money
throughout different channels and different financial derivatives. Trading
spot currencies can be done with many different methods and you will find
many types of traders. From fundamental traders speculating on mid-to-long
term positions based on worldwide cash flow analysis and fixed income formulas,
to the technical trader watching for breakout patterns in consolidating markets
or the Gann fanatic looking to duplicate the techniques of W.D. Gann, the
methods for trading foreign exchange are many. Spot currencies are a great
market for the "trader". It is where "big boys" trade
and can provide both large profit potential as well as commensurate risk for
the speculator.
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