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Home » Business And Finance Articles » How To Start Trading The Forex Market Part 3

"How To" Start Trading The Forex Market? (part 3)

10 REASONS TO START TRADING FOREX!

More and more well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency because of the following reasons:

1) FOREX is the largest financial market in the world.

With a daily trading volume of over $1.5 trillion, the spot FOREX market can absorb trading sizes that dwarf the capacity of any other market. In fact, when compared with the $50 billion daily market for equities or the $30 billion futures market, it becomes quickly apparent this gives you, and millions of other FOREX traders, almost infinite trading liquidity and flexibility.

2) FOREX is a True 24-hour market.

The FOREX Market never sleeps. Trading positions can be entered and exited at any moment around the globe, around the clock, 5.5 days a week. There is no waiting for an opening bell as in the case of trading stocks. It is a 24- hour, continuous electronic (ONLINE) currency exchange that never closes. This is very desirable for you if you want to trade on a part-time basis, because you can choose when you want to trade: morning, noon or night.

3) There is never a Bear Market in FOREX.

You can have access to a seamless exchange of currencies. Currencies trade in "pairs" (for example, US dollar vs. JPY (YEN) or US dollar vs. CHF (Swiss franc), one side of every currency pair (for example, USD/CHF) is constantly moving in relation to the other. Thus, when you buy a particular currency, you are actually simultaneously selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other. Of course, it is up to you to choose the correct currency to be long ( you bought) or short( you sold).

4) High Leverage - up to 400:1 Leverage.

You are permitted to trade foreign currencies on a highly leveraged basis - up to 400 times your investment with Fenix Capital Management, LLC and with some other brokers.

Standard 100,000- US$ currency lots can be traded with as little as 0.25% margin, or $250.

Mini FX accounts are permitted to trade with just 0.25% margin, meaning, just $25 allows you to control a 10,000-unit currency position.

Futures traders, who are accustomed to margin requirements generally equal to 5-7%-8% of the contract value, will immediately recognize that the FOREX market provides much greater leverage, and for stock traders, who must post at least 50% margin, there's no comparison. If you're looking for an efficient use of trading , trade the Forex Market.

5) Price Movements might be Highly Predictable.

Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the "technical" methods and strategies.

Unlike stocks, currencies have the tendency to develop strong trends. Over 80% of volume is speculative in nature and, as a result, the market frequently overshoots and then corrects itself. As a technically-trained trader, you can easily identify new trends and breakouts, to enter and exit positions.

6) YOU don't pay commissions or fees to trade FOREX

When you trade FOREX, through Fenix Capital Management LLC (FCM) you can do it totally FREE of commissions and fees , regardless of your account size.

Fenix Capital Management LLC, requires a very low minimum amount to open a brokerage account, only US$ 200 and they do not charge commissions or fees to trade or to maintain an account, regardless of your account balance or trading volume.

7) YOU don't have to pay trading fees or exchange fees.

There are none of the usual fees, which futures and equity traders are accustomed to pay:

NO exchange or clearing fees,
NO NFA or SEC fees.

Because currencies trade over-the-counter (OTC), via a global electronic network, in FOREX, what you see on your trading screen, is what you get, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage.

In the equity and commodity markets, you must pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.

8) HOW to Forex brokers make money if they don't charge commissions?

Like all traded financial products, over-the-counter currency trading involves a bid/ask spread, which represents the prices at which your counterpart is willing to trade. Your broker will receive a part of this bid/ask spread.

Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders can be more vulnerable to liquidity risk and typically receive wider trading spreads, especially during after-hours trading.

9) Market Transparency.

Market transparency is highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes. Unlike other markets where transparency is compromised (like in the many recent scandals), FOREX markets are highly transparent (i.e., analyzing countries, and having access to real-time research / news, is easier than analyzing companies).

Because of this transparency, as an FX trader, you will be able to apply risk management strategies in accordance to your fundamental and technical indicators.

10) Instantaneous Order Execution

The FX market offers the highest level of market transparency out of all the financial markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds.

In Forex, order execution is all-electronic and because you'll be trading via an Internet-based platform, instantaneous execution is routine.

There are no exchanges, no traditional open-outcry pits, no floor brokers, and consequently, no delays.( will be continued )

And here is another random article you might be interested in...

Leadership 101

"If...you can't be a good example, then you'll just have to be a horrible warning." Catherine Aird

Do people willingly want to follow you? The real test of leadership is influence. Would your subordinates describe you as an effective manager, supervisor or team leader? Be honest with yourself. Put yourself in their shoes. Would you want to work for YOU?! If your employees' pay, perks and benefits were not dependent on doing what you ask, would they still want to follow you? If the answer is yes, you are truly a role model of leadership.

In conducting leadership training around the world for over a decade, here are the key traits I hear over and over that employees want to see in their leaders. And most of these employees are managers themselves.These traits will sound familiar to you. Yet, we need to be reminded of them. Many managers confide to me that they're so overloaded they forget about practicing many of these qualities on a regular basis.

1) Supportive/Good listener: It's been said the average person listens to what you have to say only 25% of the time. Yes, that's right. Much of the time we're caught up in our own "stuff" and we're not always listening. Listen. Think before you speak. Some people just need to be allowed to vent. Vent within reason of course. Then, they'll be more likely to listen to you.

2) Open-minded. It's hard to listen without an open mind. At least acknowledge what your employees have to say. It doesn't mean you necessarily have to agree. In order to gain respect and get your team members to follow you, sometimes you first have to show respect.

3) Honest. Do you possess personal integrity? Your team members will look to see if you do what you say you are going to do. This sounds like common-sense and it is. Yet, many in a leadership position forget this important trait. The minute you can't deliver on your promises you lose all credibility. It will be the one thing your employees will always remember. As the saying goes, "They remember your last act." Under promise and over deliver. Always do what you say you are going to do.

True Leadership = Inspiration:

4) Inspiring. True leadership = inspiration. Real leaders have a passion for what they do. They are able to transfer that enthusiasm to their employees. People want to follow someone they respect and admire. In my leadership training, a lot of managers tell me they also want a leader "who is balanced in their personal as well as professional life." They see a balanced leader as someone who walks their talk. Employees want to follow someone who has what they want.

5) Intelligent. I frequently hear the comment, "In our organization, the left hand doesn't know what the right hand is doing." Or, "My manager really has no idea what I do for a living. What my job entails, the challenges and the time constraints." Please educate yourself on each of your team member's responsibilities. It's the only way you can speak intelligently to them and gain respect.

6) Future-oriented. Upper management should put their organization's five year, three year, and one year plan in writing and pass it out to every employee. A lot of employees don't know their organization's overall goals and objectives. An integral part of leadership is having vision, and being able to convey that vision in a way that excites and inspires team members. A great way to motivate most of your employees is to show each and every one where they fit in with the organization's big picture. Most of them want to know their purpose and how they make a difference.

Effective Leadership = Effective Social Skills:

7) Excellent communicator. Many people are promoted to leadership positions based on their "hard skills" or technical skills. Yet, most managers describe true leadership as demonstrating good interpersonal skills. Excellent leaders and managers aren't just good communicators in terms of what's expected on the job. They also make it a priority to take a sincere interest in their employees. Little things go a long way. For example, know your employee's birthdays, whether or not they have children, and acknowledge their length of service on their anniversary.

8) Fair-minded. Employees and managers alike respect leaders in an organization who are fair, objective, and "don't play favorites." They want sincere recognition for a job well done. Most employees want to be judged on their performance, not on whether or not they've got friends in high places.

9) Flexible with change. An effective leader is open to change, new ideas and taking risks. A leader who is a good role model doesn't take a "my way or the highway" approach. They're confident enough in themselves that they can give explanations for WHY a change is being made. Employees always want to know why. Managers and leaders who are secure within themselves don't need to say, "Because I'm your supervisor and I said so."

10) Leadership starts with service. Effective leadership involves rolling up your sleeves and helping others. The term "servant leadership" was coined in 1970 by Robert K. Greenleaf, former AT&T executive and founder of The Greenleaf Center for Servant-Leadership. He wrote, "It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead."

"A good example is the best sermon." Anon.

Copyright (c) 2006 Colleen Kettenhofen