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ONLINE FOREX TRADING Chapter 2:

WHY CHOOSE FOREX OVER OTHER MARKETS?

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Online Forex Trading

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WHY CHOOSE F OREX OVER O THER MARKETS? Forex is the world’s largest market, but why is it right for you? The Forex market is the largest trading market in the

That means the Forex market has the least

world. It sees roughly $4 trillion in volume daily,

slippage of any market out there . That saves you

compared to about $28 billion at the NYSE. All American stock market trades come in under $200 billion in daily volume. The Futures market operates at around $440 billion a day. Add everything up, along with the rest of the world’s stock markets, and you still don’t come close to the money moving around in the Forex market on a daily basis. So, why is all that money moving around a benefit to you? Because it means better fills on each order you put in, meaning less slippage. Slippage refers to when you attempt to purchase a market item at a given price but see your actual purchase made at a different price because the market moves before your order is filled. When there’s more volume, slippage happens less often. © 2011 ForexCommune.com All rights reserved worldwide

money right there. Not only are the fills better, but spreads (the costs of your transactions with the market maker) are lower than in other markets. Another major benefit is the lack of commissions. You don’t have to pay two brokers and one market maker like in more traditional stock market trading. Instead, you pay the spread to one market maker, and that’s it. That means that every trade you make in Forex is saving you money compared to trading in other markets, regardless of whether you win or lose in the actual move. The Forex market is also open 24 hours a day, so

you can trade from anywhere at any time. That Page 2


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gives you all kinds of flexibility, and we know that’s a

ruined thinking about rushing to get your trade in at the

major advantage in any business transaction. Stocks can

first bell on Monday morning.

only be traded 6.5 hours daily from Monday through Friday. The Forex market is open 24 hours a day from

Lastly, there are no restrictions on short selling in the

Sunday evening through Friday evening. That means you

Forex market, opening up a lot of freedom for traders.

don’t have to trade during work, when your focus is

American markets don’t want their stocks shorted, so

divided. Obviously focusing 100 percent on what you’re

they make it more difficult to do so. The Forex market

doing will help you earn more money in the long run.

doesn’t work that way. If you want to sell or buy with your own prerogative, it’s up to you. You don’t need to

major

enlist the help of a firm to try to find “shares to borrow”

announcements are made, you can react to them

as in the stock market, and there are also no “uptick

One

other

note

of

interest:

when

immediately. In the stock markets you often can’t until a couple of days later. With Forex your weekend won’t be

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rules.” This is pretty much common sense because when you’re trading one currency for another, the whole point is that one will appreciate and the other will depreciate.

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Chapter 2 - Why Choose Forex Over Other Markets?