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Forex Mini Account - Am I Eligible?If you were just learning about Forex Markets a good idea for you would be what is called the Forex mini account. The mini account is also great for those who want to start off with a fairly low investment. A mini account can be opened with only...
Free Online Forex Trading Courses - Some Basics
Are there any good free online forex trading courses on the Internet? It all depends who you talk to. Before you decide to believe everything that you read after you download free online forex trading courses there are a few issues that you should...
Who Should Trade a Mini Forex Trading Account?
A mini forex trading account is designed for those who are new to forex trading or when the trading account balance is less then $10.000. Mini forex account key points - Only $250-$300 to open - Up to 200:1 trade leverage - 1 pip = $1...
5 Reasons to Trade Forex Instead of Stocks
While Forex trading is becoming more popular in the United States, the vast majority of investors still do not understand the massive advantages offered in the foreign currency market when compared to equities or fixed income trading. When you fully grasp the following concepts, you'll understand why you might want to reconsider your current investment strategies.1. Currency prices are not heavily influenced by institutional investors. In stock trading, there is a limited amount of volume on a daily basis. Each stock has a specific number of shares on the open market and trade prices are governed by the number of people attempting to buy or sell shares at a specific point in time. This makes the market vulnerable to price swings when a large investor is attempting to buy up or unload large amounts of shares. For example, if some pension fund owns 10% of a company and suddenly decides to liquidate their position, the market is now flooded with sell orders. Since the amount of shares attempting to be sold will outnumber the amount of buy orders, the price of the stock will start to drop as the number of buyers days up. This creates losses for the remaining shareholders. On the other hand, the forex market is so massive and has so many investors that no single investor can possibly have a major impact on pricing. There are too many units of Euros, Dollars, Yen, etc for any single institution to hold even close to a controlling interest in any currency.
2. Margin requirements are significantly lower in forex trading than equity trading. While the exact amount of margin allowed is determined by each broker, the restrictions are usually much less stringent when trading forex. Margin allows the investor to "play with house money." In essence, you're borrowing money from the broker to invest in your own account. While this can be risky, it can also be insanely profitable. For example, let's say you have $10,000 of your own money to invest. If you open up a margin account at an equity broker, you can usually margin up to 50% of the value of stock. So if you buy $10,000 in Microsoft stock, you can borrow another $5,000 to own a total of $15,000 in value. With your forex account, the margin requirement is often as low as 1%. Which means that if you buy $10,000 in Euros, you can use your broker's money to buy another $1,000,000. So you now own over $1 million in Euros. Now lets say that the value of each investment increases 10%. Your $15,000 in Microsoft stock is now worth $16,500. You sell it, pay back the $5,000 you borrowed, and you pocket $1,500 in profit (minus any fees or interest). Your return on investment is 15%. If your Euros went up 10%, your $1 million is now worth $1.1 million. After selling and repaying your broker, you profit $100,000 before any
interest. That's a return on investment of over 1,000%. Of course, you need to be extra careful when trading on margin. Imagine if the transaction went the other way. You'd be in a much bigger hole in the forex scenario. But the potential for enormous gain is there and is one of the major reasons why forex trading is so attractive to serious investors.
3. Forex trading is open 24 hours a day. Unlike the U.S. stock markets, you can trade forex any time of day from Monday through Friday. If a major news story breaks when you're holding stock, and it's after hours, you're stuck holding onto your position until the market opens the next day. By the time this happens, everyone else knows the news and there's thousands of buy/sell orders waiting when the opening bell rings. This will dramatically influence your trade price and negate any advantage you might have had by being one of the first to react. Keep in mind that many corporations withhold major news such as earnings reports and personnel moves until after the market closes. They do this to minimize emotional trading, which is smart for them to do but also hurts savvy investors. Since Forex trading is open 24 hours, you can place your trade order whenever major events occur.
4. The foreign exchange market is more liquid than the equity market. Forex is the largest market in the world. Every day, an average of $1.4 trillion dollars is traded, and the amount of securities (foreign currencies) is minuscule when compared to the number of companies traded in the equities market. This means that there are always buyers to be matched with sellers, which means that you'll have a much better chance to get a fair and accurate price on your trade than if you were trading a low volume stock where the bid and ask spreads can be very large.
5. Forex trading offers the advantage of limited risk. This is one of the large advantages over the futures market. When you buy a futures contract, you are obligated to buy or sell a specific amount of a specific commodity at a specific time for a specific price. Which means that if disaster hits, you're out of luck. For example, lets say you buy a futures contract to sell corn. If news breaks that reports an outbreak of deaths caused by a pesticide used in corn crops, the price on your contracts will drop through the floor, limits will drop, and you could be stuck in your position and end up taking massive losses. This would not happen in the forex market since you can leave your position at any time.
About the author:
This article is just a small piece of the free Forex Trading Course at forexgameplan.com. Go learn about this incredible market and sign up today while the 30 day course is still free.
Written By: Francis Gillen
WORLD FOREX: Dollar Ekes Out Gains In Thin Holiday Trade Wall Street Journal TORONTO (Dow Jones)--The dollar eked out marginal gains Friday in activity made narrow and illiquid by the close of US ... FOREX VIEW:Dollar Could Firm Within Existing Ranges Next Week WORLD FOREX: Return Of Risk Aversion Keeps Dollar Rising WORLD FOREX: Dollar Posts Large Gains After June Jobs Report |
 Reuters | WORLD FOREX: Dollar Rises, Euro Falls Waiting For Payrolls Wall Street Journal LONDON (Dow Jones)--A small rise in risk aversion has helped the dollar and hit the euro in Europe Thursday as the market waits for the ... FOREX-Dollar falls as stocks gain; Europe data dent demand WORLD FOREX:Euro Falls Below $1.40, Down Vs Yen On Payroll Data WORLD FOREX: Yen Up On Risk Aversion After US Jobs Data |
 Reuters | FOREX-Euro recovers from sharp falls vs dollar Reuters LONDON, July 3 (Reuters) - The euro recovered modestly against the dollar on Friday after falling sharply in the wake of bleak US jobs ... Forex − Risky Assets take a hit on US Payrolls FOREX-Dollar dips vs euro in holiday-thinned trade Forex news: the yen falls against European majors as Japanese ... |
 Boston Globe | FOREX-Dollar up vs euro, down vs yen on weak US jobs data Reuters "The weak jobs report reinforced a trend already in place in the forex market prior to the release, that is, that the dollar was oversold," said Camilla ... Still No Change in Tight Forex Ranges after ecb's Rate Decision Forex trends: euro is trading down versus majors Dollar gains as US jobs report rattles markets |
WORLD FOREX: Dollar Mixed In Light Holiday Flows Wall Street Journal TORONTO (Dow Jones)--The dollar is mixed Friday morning as light trading flows due to the Independence Day holiday in ... |
Japan's new forex tsar seen sticking current stance Reuters Besides economic turbulence, Tamaki is faced with a global debate on whether the world should decrease its dependence on the dollar as the main ... |
A Forex Trader's Tale of Central Bank Intervention Forex Hound In those days the dollar was under pressure so most of the orders were to buy dollars. It was the early 1980s and I co-managed a trading operation for a ... Forex Market Update: Japanese Yen Crosses Pare Losses In European ... WORLD FOREX: Dlr/Yen Up As PBOC Comments Ease Concerns Forex trend: yen pares its early Asian gains |
WORLD FOREX: Dlr Back Up A Bit Vs Yen After Post-Jobs Fall Wall Street Journal TOKYO (Dow Jones)--The dollar rose back slightly against the yen in Asia Friday after tumbling yesterday on weak ... |
 China Daily | WORLD FOREX: China Helps Dlr; Risk Hits Euro, Data Hit Pound Wall Street Journal LONDON (Dow Jones)--Reassurances from China about its reserve policy left the dollar higher but the euro has ... Dollar gains as data suggest brighter US economic outlook FOREX-Dollar recovers, supported by low risk demand FOREX-Dollar holds near 3-week lows as payrolls awaited |
 AFP | CORRECT:WORLD FOREX: Rising Risk Appetite Pushes Dollar Lower Wall Street Journal ("=WORLD FOREX: Rising Risk Appetite Pushes Dollar Lower" published at 0928 GMT and 0929 GMT, misstated the level of the dollar against the yen in the 15th ... Liquidity crunch to keep US dollar demand strong Forex Trading - Dollar Down, Positive Finance News Dollar drops against rival currencies |
