What are the benefits of Forex Trading?

No Brokerage Commissions:   Transacting in the FOREX market does not require a 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. For example, brokerage commission in the futures market may fall anywhere from $25 to $75 per contract. The absence of brokerage commission is an immediate cost savings to the FOREX trader. Small transaction fees may apply when FOREX trading, but these are typically in the neighborhood of one dollar per transaction.

Minimum Starting Balances:  The minimum starting balance for both the Flexi and Mini accounts is $300 and this places FOREX trading within reach of those individuals who have only a modest amount of risk capital. Furthermore, there is an operational FOREX policy to automatically close all open positions the moment that margin in the account drops below the required level, and this helps to ensure that the trader never loses more than the money that was originally deposited.

Streaming Real-Time Quotes:  In the FOREX market, traders execute directly off streaming real-time bid and offer quotes meaning that there is very little uncertainty of the fill price of an order. The bid or ask that you see quoted is typically the price at which you are able to deal. While there may, on rare occasion, be a slight discrepancy between the two, it should be noted that in most other markets, a trader faces greater uncertainty of the fill price of an order, especially when transactions must be executed on an exchange floor to which the trader does not have direct access. Streaming real-time FOREX quotes ensures that market, limit and stop orders are typically executed without partial fills and without slippage.

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. And 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. This means that a trader never has to approximate account equity or be uncertain in regards to available margin.

High Leverage:  Margin is required to trade FOREX but the margin is not a down payment on a purchase of equity, as is the case in the stock market, but rather it serves as a performance bond or good faith deposit, as in the futures market. The margin is required to ensure your 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.

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