MERITS IN FOREX TRADING, SMART ZOMBI'S.

ADVANTAGES OF FOREX TRADING:

Although the FOREX market is by far the largest and most liquid in the world, day traders have up to now focused on seeking profits in mainly stock and futures markets. This is mainly due to the restrictive nature of bank-offered FOREX trading services.

There are many advantages to trading spot foreign exchange as opposed to trading stocks and futures. Some of these are given below.



1. SPREAD RATES:

Most online FOREX brokers offer a spread of 5 pips on EUR USD which is the most widely traded and liquid currency pair.

In the futures market spreads can vary anywhere between 5 and 9 pips and can become even larger under illiquid market conditions (which tends to happen substantially more often in futures currencies.

2. ALL TIME MARKET:

Foreign exchange market trading occurs over a 24 hour period picking up in Asia around 24:00 CET Sunday evening and coming to an end in the United States on Friday around 23:00 CET. Although ECNs (electronic communications networks) exist for stock markets and futures markets (like Glob-ex) that supply after hours trading, liquidity is often low and prices offered can often be uncompetitive.

From Sunday evening to Friday Afternoon EST the FOREX market
never sleeps. This is very desirable for those who want to trade on a part-time
basis, because you can choose when you want to trade--morning, noon or night.



3. QUICK SELL BEFORE YOU PURCHASE:

Equity brokers offer very restrictive short-selling margin requirements to customers. This means that a customer does not possess the liquidity to be able to sell stock before he buys it. Margin wise, a trader has exactly the same capacity when initiating a selling or buying position in the spot market. In spot trading when you're selling one currency, you're necessarily buying another.

4. HIGH LEVERAGE MARGIN:

FOREX brokers offer trade margin of 50, 100, 150, or even 200 to 1 of trade margin.

FOREX traders often find themselves controlling a huge sum of money with little cash outlay on the table. For example, a $1,000 in a 150:1 FOREX account will gives you the purchasing power of $150,000 in the currency market.

While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool.

Rather than merely loading up on risk as many people incorrectly assume, leverage is

essential in the FOREX market.

5. LIQUIDITY MARKET:

Turnover value in FOREX is $1.9 trillion per day. It is the largest trade

market in the world and the liquidity of the market is huge. Traders can easily cash in or cash out their capital in Forex market.

6. SMALL TRADING:

One might think that getting started as a currency trader
would cost a lot of money. The fact is, it doesn't. Online FOREX Firms now offer
'mini' trading accounts with a minimum account deposit of only $200-$500 with
no commission trading. This makes FOREX much more accessible to the

average
individual,

without large, start-up capital.

7. EVERY TIME MAKING PROFIT:

On the stock markets, you can only make money if shares are rising, but in economic
recession and falling 'bear' markets, there is little chance of making big money.
Forex is different. One of the most exciting advantages of FX trading is the ability
to generate p

rofits whether a currency pair is 'up' or 'down'. A trader can profit
by taking a 'long' position, (buying the currency pair at one price and selling it

later at a higher price), or a 'short' position, (selling the currency pair and buying
it back at a lower price). For example, if you think the US dollar will increase in
value vs. the Japanese Yen then you will buy Dollars and sell Yen (go long). If
you think the Yen will increase in value against the Dollar then you will sell
Dollars and buy yen (go short). As long as the trader picks the right direction, a
potential for profit always exists.

8. HIGHLY DESIRED TRADING ENVIRONMENT.

Market transparency is highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes. Unlike other markets where transparency is compromised. FOREX markets are highly transparent.

Because of this transparency, as an FX trader, you will be able to exercise risk management strategies in accordance to the proper fundamental and technical indicators.

The FOR

EX market offers the highest level of market transparency out of all the financial markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds. Markets that do not offer executable prices and force traders to absorb slippage obviously compromise the trader's profit potential considerably.