| Pros of FX Trading |
Why do we choose to trade Forex instead of stocks, futures, commodities, or
options?
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Equal Prospective in Rising or Falling Market Trend
There is no structural bias to the market and there are no restrictions on short selling in FX market.
Trading in Forex gives you equal prospects in both rising and falling market.
As trades are always done in pair of currency pairs, Forex traders can always find chance to
make money anytime, regardless of the fall or rise of one single country currency.
Trade Forex 24 hours a day
Forex market never sleeps. In Forex trading, you do not need to wait the market to open, you
can always response to the world latest movement and news immediately.
Leverage trading in Forex market
Also, with the flexibility of Forex market trading time, you can work on your trade in Forex during
your free time. This means you can start small and work as part time trader before going full time
on FX trading
High Leverage Margin
Forex brokers offer trade margin of 50, 100, 150, or even 500 to 1 of trade margin.
Forex traders often find themselves controlling a huge sum of money with little cash outlay on the
table. For example, a $1,000 in a 150:1 Forex account will gives you the purchase power of
$150,000 in the currency market
While certainly not for everyone, the substantial leverage available from online currency trading
firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people
incorrectly assume, leverage is essential in the Forex market.
This is because the average daily percentage move of a major currency is less than 1%, whereas
a volatile stock can easily have a 10% price move on any given day.
Trade Forex anywhere from the world virtually
A computer with Internet connection plus an active Forex account are sufficient for you to
execute a trade in Forex market.
Professional Forex traders have the privilege to travel around the world but yet still remain
connected to the market anytime, anywhere. The freedom of this is something you could not get
anywhere else by being an employee of a cooperation.
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Cons of FX Trading |
Downside of Leverage
Today, you can leverage your investment with an online Forex broker by 200, or even 500 to 1 and
this creates tremendous profit potential. But it's a fact that most traders actually over leverage and
lose.
With leverage you need to be very accurate with the execution of your trading signals and very
careful with your stop loss protection. When trading on leverage, if you are not careful, a quick
equity spike will wipe your position.
In stock trading you can buy and hold and you only risk what you have paid for the stock and so
long as it comes back you make a profit and you can wait.
In Forex trading, its different - you have losses that are open ended and they pile up quickly. You
can't just sit back - you need to take action.
As most traders lack discipline, they very often hope a position turns around and don't have a get
out point. A small loss soon ends up being a big loss and their equity is gone.
Volatility
Forex prices are volatile and make big moves everyday - combine this with leverage and you
have a powerful tool for profits which of course can also cause losses.
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Disclaimer: Any trades placed upon reliance on fund manager's system are taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading foreign currencies, there is also substantial risk of loss in all trading. You must decide your own suitability to trade or not. Foreign current trading results can never be guaranteed.
Any opinions, news, research, analyses, prices or other information contained on this website or linked to from this website are provided as general market commentary and do not constitute investment advice. FXcellent does not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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