The Advantages of FOREX Trading - Part Two

Forex Trading is Open

Unlike the stock market there can be no "insider trading" on the Forex. The high volume and almost instantaneous reaction to financial news means that it is impossible for any one party to control currency movements. Even if a government tried to control the price of its own currency, market forces would quickly overpower that attempt. This means that all Forex traders are operating on a level field. No one - no mater how big they are - has an advantage over anyone else.

Forex Trading is Commission Free

Here comes the best part - especially if you are used to brokerage fees charged for trading stocks. There is no commission on Forex trades - brokers earn money buy setting a spread between buying and selling prices. The spread is measured in pips - the smallest division of a particular currency. In US dollars a pip is worth 1/100 of a cent.

No commission trading means you can make as many trades as you like without worrying about transaction fees. The volatile nature of the Forex market means you can make a profit in a few minutes after opening a trade. Multiple trades per day are commonplace.

How can Forex be Profitable?

You may be thinking - How can I make a profit if the price movements are measured in 100ths of a cent? Don't forget, Forex trading depends on leverage, which means you are controlling up to 100 times more money than your actual investment.

So every time the US dollar moves a pip, that represents a $1 profit (or loss) on a mini trade or $10 on a standard trade. A movement of 20 pips (2/10s of one cent) can earn you a profit of $20 or $200.

Is Forex Safe?

Any investment has its risks, but Forex trading can be one of the safest investments around. There are many safeguards built in to the system to prevent you from losing more than your original investment.

In order to be successful at Forex, though, you MUST know what you are doing. An unknowledgeable trader is at the mercy of the wind and will make unwise trading decisions.

This is where Forex Aid comes in - we can give you the knowledge and the skills you need to be a successful Forex Trader.