Let me first say admit that I am biased. I make a living trading Forex and so I have obviously already made the choice of Forex over stocks. However, I am asked on a regular basis, "why Forex over stocks?". Let me take a few moments and explain why I chose to trade the foreign currency exchange market over the stock market.
1) Leverage - Unlike the stock market, in Forex the investor can leverage his investment much farther. The typical Forex trader trades at a leverage of 100:1. So for every $1 dollar he invests into the market he is able to trade $100. This high leverage can be a double-edge sword though. While the Forex trader can make money faster, he can also lose it faster. I chose Forex because I can make money faster using higher leverage. You must decide if higher leverage /higher risk is appealing to you.
2) 24 hour Market - Retail Forex Brokers are open 24 hours a day, 5 days a week. That means that you can make money round the clock. This also allows the trader to use different strategies depending on the time of day. However, this also can be a bad thing. A 24 hour market has a tendency to overwork the Forex Trader. Without the proper discipline the Forex trader can turn into a workaholic. I chose Forex because of the opportunity to make money even while I was asleep.
3) Largest Financial Market in the World - The Forex market is, by far, the largest Financial market in the world. Analysts estimate that nearly $3 trillion in daily volume trades through the Forex market, this compares to just $25 billion daily at the NYSE. Having such high volume means no specific individual, company, or even government can control one currency over another. I have friends who are convinced the stock market is "rigged". And while I don't know that to be true. I do know that, because of the huge volume going through the Forex market and the millions of daily players trading the market, that the chance the deck is stacked against me is much less.
4) Make Money in both directions - There is no such thing as a Bullish or Bearish Forex market. There are Bullish currencies and bearish currencies, but every trade is taken by buying one currency against another. This means that the Forex trader always has the opportunity to trade in a profitable direction.
5) Low Transaction Costs - In Forex, the cost of getting in and out of the market is fairly low depending on the currency pair being traded. This low 'spread' cost means that I am not immediately no far in the whole when I enter the market.
6) Free Practice Accounts, Market Analysis, Charts, etc. - Most brokers provide free charting, market analysis, news, as well as a practice account to learn before you trade. This makes getting into Forex trading very inexpensive.
7) Start trading with as little as $250 - Now, I don't recommend that anyone start trading until they have at least $1000. However, the fact that anyone can start with as little as $250 depending on the broker makes getting into Forex is extremely easy.
Echo FX prides itself on being an experienced, honest, disciplined, and emotion-free Forex Account Manager and quality Forex Trading Education provider. For more information about the company, their Managed Forex Account Programs, or Forex Trading preparation solutions - visit http://www.echocurrency.com (Forex Managed Account) and http://www.AcademyofForex.com (Forex Education) |
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