Forex trading has several benefits as compared to futures or stocks. You might not realize that foreign currency exchange is possibly the largest market in the world. It is an incredible 46 times as large as all the other types of futures markets. We’re talking US $1.4 trillion! And this trading exists in a free market place. There is such a huge volume of Forex trading globally that governments are often not able to have complete control over the value of their own currency.
Forex has low margins!
As a Forex trader you will control great amounts of currency with the ease of only having to come up with a small amount of margin. This may seem like futures and stock speculation but Forex has much lower margins than these. For example, trading futures may require you to outlay close to 5% of the full value of the holding, or even 50% of your stock’s total value. But with Forex, you find merely a 1% margin requirement. This means you only need $1000 in order to trade $100,000.
So, you can trade with five times the value of product as you could as a futures trader. And compared to a stock trader, your trading ability is 50 times more than theirs. Forex trading can be a very good way to quickly build your investment strategy and see great profit. However, as with any investment plan, you need to be certain that you are aware of the risks involved. You must know how your margin account operates. Carefully read the margin agreement that you have between you and your clearing firm. Clarify anything you do not fully understand with your account representative. This will help ensure your success with Forex.
It is also advisable to keep a close eye on your margin balance regularly and use stop-loss orders on all of your open positions. Make sure you minimize any downside risk. You might experience situations when your account is partly or totally liquidated when an available margin is below a pre-set limit. Although you would most likely receive a call before this happens, don’t always count on that. Monitor your account on a regular basis.
Forex has no exchange fees or commission!
Futures trading always brings with it brokerage and exchange fees. You won’t have this headache with Forex – it is completely commission free. Currency Trading is a global inter-bank market. You are instantly connected with sellers world-wide, which is a great advantage for you. Here’s an illustration. If you were trading a Japanese Yen/US Dollar pair, Forex would provide you with a 3-point spread which is worth $30. If you were trading futures you would have a 1-point spread ($10) and in addition to this lower spread you would pay a commission for your broker. This fee can range anywhere from $10 to $50. The $10 fee would be for self-directed trading online. The $50 fee would constitute full-service trading. Also consider that it is all inclusive pricing. It’s smart to compare online Forex charges and your particular futures commission in order to find the best deal. Just remember that with Forex you typically pay no fees for a broker to find a seller for you. You work directly with your seller in Forex trading.
Forex markets are round-the-clock!
Instead of the limitations of a few normal business hours per day, you have access to Forex trading 24/5. You have the flexibility of taking action around the clock. For instance, if a major downturn in the market happens at outside of typical business hours, you can protect your investment and get out of a losing deal right away. There is no need to wait until the opening of the next business day. You have the safety and convenience of trading at any time five days per week, Monday through Friday. That means if it’s midnight at home in Chicago you can still trade with Tokyo or Sydney or London.
Forex gives you guaranteed stops and reduced risk!
It’s a fact that with futures trading the risk there is risk without end. Let’s look at the following scenario. After careful analysis of the situation you are certain that prices for live cattle will continue to move steadily upward. This happened in 2003, but unfortunately mad cow disease was discovered. You know the rest. Cattle prices plummeted. In trading futures you would have been stuck and encountered quite a loss as a result of this unforeseen market downturn. Your investment profits would keep diving. Forex provides a greater safety net for your important resources.
I’ve talked about only five of Forex’s many benefits, but these five are crucial to your profits and financial well-being.
Ferris Malone
http://www.articlesbase.com/finance-articles/currency-trading-5-advantages-that-can-make-you-money-748906.html
Advantages / Disadvantages of having a (semi) global currency / trade bloc?
Hey, well ive got a test in a couple of days so yeah thought id try gain insight into this topic. So say the Asian Pacific Union goes through (asia pacific , Aus , China, U.S , India incl.)… and a singular currency is developed for this union. (Much like a second E.U) what would be the economic implications for countries within this union? So far i have these points ….
Positives
Increased specialisation as each of the nations can import goods cheaper
Less hostility between nations as they are increasingly dependant on each other for trade reasons.
Due to increased specialisation; incresed efficiency and overall increased economic output while at the same time decreseing E.U’s ability to ‘bully’ outsider nations.
Singular currency makes it easier to compare prices and hence increases competition.
AGAINST
Asia Pacific Union could result to job losses in developed nations since there are no trade barriers. – Forcing specialisation for counries where it is unwanted?
The singular currency would mean low low inflation rates in developed nations as opposed to a very high inflation rate in the developing asian nations.
Now, although i will be conducting my own research before my test i thought it may help if i post here; how does the E.U combat this inflation problem? is there a singular interest rate ? or does it fluctuate accross the nations and if they do what happens to the banks with high rates, does all the money get concentrated here? if you could please help answer these questions aswell as add on to my pro’s and conn’s that would be greatly appreciated thanks…
Having another currency right now would cause a collapse of the world trade.Why? Because many countries have their Central Bank reserves on US dollars, yes, I know that the Green Back will be replaced,because it is a "sick currency", but this change has its drawbacks,for example the Yuan is not convertible,and that is a condition any new International Currency ought to have.
Right now Brazil, Russia, China and India are using their own currencies for their trade because they know that US dollar is plummeting and to keep their monetary reserves on US dollar is dangerous.
All this reflects the irreversible agony of Capitalism.
References :
http://news.yahoo.com/nphotos/slideshow/photo//090616/ids_photos_wl/r1202833201.jpg/
i think what you said is wrong and your gonna fail your test and your not gonna get into anu and your gonna end up going to jail.
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