What are the benefits of Forex Trading? (Continued...)

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. In other markets, real-time quotes, charts and news are available only at considerable cost, in some cases, hundreds of dollars per month.

Flexible Unit Sizes: FOREX traders can choose among three types of accounts:

(1) Standard
In this account, the size of a trade can be 50,000 units or 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.
(2) 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.
(3) Flexi
In this account, the size of a trade can be 1,000 units or 5,000 units of foreign currency. The Flexi account has the smallest contract sizes and, consequently, the smallest risk.

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 when 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.

High Liquidity:  Every three years, the Bank for International Settlements conducts a Central Bank Survey of Foreign Exchange and Derivatives Market Activity. The most recent survey was done in April 2001. According to this Survey, the average daily turnover in traditional foreign exchange markets was $1.2 trillion, or $1,200 billion, making it the largest and most liquid market in the world. This market can absorb trading volume and transaction sizes that dwarf the capacity of most other markets. Of the currency pairs, EUR/USD was by far the most actively traded and captured 30% of global turnover followed by USD/JPY with 20% and GBP/USD with 11%.

Forex Benefits were provided compliments of Rick Thachuk