LEARN TO TRADE FOREX: ADVANTAGES

When it comes to trading and investing online, there are very few opportunities that are as lucrative as Forex. Many people have a idea that Forex is an overly risky proposition as opposed to the stock market or options, but many people don't have a firm grasp of the advantages of trading Forex as opposed to ordinary stocks or options trading.

There are five unique things that give Forex trading a advantage over other trading and investing opportunities.

First, the forex market is constantly in operation. Unlike the U.S. stock market that has defined trading times, the Forex market is open 24 hours a day. Trading goes on non stop from its opening in Australia on Sunday evening, and concludes in the U.S. (New York) markets on Friday.

Next, the forex market is liquid, meaning that profits and assets can be sold and liquidated very quickly, many times without any price discounts. This allows traders to move large amounts of capital in and out of new positions quickly, usually with minimal changes in price movement.

Third, Forex has a much lower cost per transaction than most other markets. On most cases, the cost for the transaction is part of the price, and is added into the spread. The spread is the difference between the selling and the buying price of a position.

Brokers in Forex also allow traders to use leverage to trade in the markets. Using leverage, you can actually trade more money that the money that you would actually have in your account. Example: if you were trading at 100:1 leverage (not all that uncommon in forex trading) you could trade $100 on the market for every $1 that you had in your account. The possibilities are vast. In this example, you could control a $100,000 trade with only $1000 in your account balance.

Finally, the forex market has no restriction on selling long or short. If you believe that a currency pair is going to rise in value, you can purchase it, keep it, and go long. If, on the other hand, you think that a buy is going to decrease, you can sell it, or go short and get out with a profit.

Forex is a fantastic way to make money, with the right training and understanding of the markets. And, with the right training, even a novice Forex investor can do very well.

There are more than a few ways to learn Forex effectively. One is by being in a community of other seasoned investors. By taking this approach, you can usually avoid many of the mistakes that they once made. It never hurts to have an encouraging word from a person that's been in the investing trenches, either.

Another is by soaking in as much as you can about Forex from respected authors. Once again, if you hear about a particular author over and over again from other investors, he or she may have something that you may find beneficial.

It's no crime to take baby steps when starting out in Forex. The mantra "slow and steady" works just fine in this arena of investing.

SOURCE
http://www.articlesbase.com/finance-articles/learn-to-trade-forex-advantages-732515.html