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BENEFITS OF FOREX

Below are the benefits of trading the Forex markets:

Minimum Brokerage Commissions
Transacting in the FOREX market does not require much brokerage commission expense. As any experienced trader knows, equity transactions and futures transactions both require brokerage commission that, in some cases, constitute a significant expense. Minimum brokerage commission is an immediate cost saving to the FOREX trader.

Minimum Starting Balances

Forex Trading Benefits
The minimum starting balance for accounts is $300 thus placing FOREX trading within reach of those individuals who have only a modest amount of risk capital. Furthermore, an operational FOREX policy automatically closes all open positions the moment margin in an account drops below the required level. This helps to ensure that the trader never loses more money than that originally deposited.

Streaming Real-Time Quotes
In the FOREX market, traders execute directly off streaming real-time bid and offer quotes. The bid or ask one sees quoted is typically the price at which one is able to deal. Whilst there may arise discrepancies between the two, it should be noted that in most markets, a trader may face uncertainty with regard to price fills for an order, especially when transactions are executed on an exchange floor to which the trader does not have direct access to.

Open 24 hours a Day
The FOREX market operates continuously from its open at 2pm Sunday afternoon New York time with the Sydney-Auckland market until its close at 5pm Friday in New York. FOREX trading follows the day around the world: from Sydney to Tokyo to London to New York. The seamless 24-hour nature of the FOREX market enables the trader to react to news as it occurs - regardless of the time. It gives the trader the flexibility to set their own hours of the trading day.

Real Time Reporting
In the Forex market, traders can see the value of their positions and account equity move up and down with the market in real time. This key information for every account is re-calculated and updated every time the exchange rates change. Traders have immediate access to detailed information regarding every open position, open order, and the generated profit/loss per trade.

High Leverage *
Margin nodoubt, is required to trade FOREX but margin is not a down payment on purchase of equity, as in the stock market, but rather it serves as a performance bond or good faith deposit, as in the futures market. Margin is required to ensure ones ability to handle the financial risk of the trade. With FOREX, the required margin is only a very small percentage of the market value of the position being traded. For example, margin of the mini contracts typically is under $200. (Margins vary.) This is referred to as leverage*. In other words, by using leverage*, a trader can hold a position much larger than the account value. High leverage* means that a change in FOREX prices will have a much larger impact on the dollar value of the account and this can work both in favor of the trader and against the trader.

Real-Time Charts and News
The availability of real-time charts and news - along with streaming real-time quotes - enables the FOREX trader to react immediately to developments as they unfold. There is no need to wait until the market opens before taking appropriate action.

Flexible Contract Sizes
FOREX traders can choose among two types of accounts:
Standard
In this account, the size of a trade can be 100,000 units of foreign currency. The latter is referred to as a "standard" contract and is similar in size to a typical futures contact.
Mini
In this account, the size of a trade is 1/10 the standard contract, or 10,000 units of foreign currency. This is referred to as a "mini" contract. Profit and loss is one-tenth the amount of the corresponding standard contract.

There is no difference in price or liquidity between the different unit sizes. The only difference is that the smaller unit sizes have smaller risk and therefore, smaller margin requirements. The trader has the flexibility in selecting a contract size that is appropriate to their amount of trading capital and tolerance for risk.

Automatic Closure
An important element of risk management in FOREX trading is the automatic closure of all customer positions in the event that funds in the account fall below margin requirements. This prevents a trader's account from falling into a negative balance.

* The high degree of leverage that is often obtainable in forex trading can lead to large losses as well as gains

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.Retail off-exchange foreign currency trading involves the risk of financial loss and may not be suitable for every individual.

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