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Why Forex Trade ?
It trades about $4 trillion EACH DAY. To put this in perspective, the New York Stock Exchange (NYSE) trades around $28 billion a day. The entire U.S. stock market trades about $191 billion daily. The Futures market trades about $437 billion daily. None of these even come close to $1 trillion, much less several trillion.
|Advantages of Forex Trading|
- No Commissions
You have no commissions in this market since you don’t have to go through a broker on your way to the market maker. You simply deal directly with the market maker and therefore you don’t have a broker’s commission. This is a huge savings and allows you to get into profitability much sooner too. For instance, in stocks, you are charged twice (a buy commission and a sell commission). Ouch!
- 24 Hour a day Trading
Unlike stocks, that trade only 6 ½ hours a day, you can literally trade Forex anytime 24 hours a day (Saturday & Sunday Market Close). So instead of having to trade at work (like people do all over America with stocks), they can trade after work when they can really have some focus. So it doesn’t matter where in the world you are or what shift you work…you can trade Forex. More tradable hours means more tradable opportunities.
Also, many important announcements come out for stocks when you can’t even trade them (before or after the bell). In Forex, you can trade currencies at the time of the news announcement if you like.
- No restrictions on Short Selling
In stocks people want to to go UP and not down. However, in Forex, you can short just as easily as you can “go long” (buy). The fills are just as quick. There isn’t any need for a firm to check for “shares to borrow” like in stocks. There are no “uptick rules” either. There’s none of that nonsense to worry about.
Besides, in currencies, you are always going long one currency in the pair and essentially short the other. So they don’t care which one you are long or are shorting.
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