The Perfect Market

The foreign exchange market is widely praised as one of the largest and most liquid financial markets in the world. The market was created during the 1970s as the old fixed exchange rate system gave way to floating exchange rates in most countries.  Commercial trade between companies across international borders means that a company could earn its income in one currency but purchase goods in another. The foreign exchange market offers a means of converting the foreign currency back to the domestic currency of the home market.

Why Forex is Unique?

No other market offers the volume of trading and liquidity that we enjoy in the foreign exchange market. The average daily volume was reported at around $4 trillion in 2007 and is growing rapidly. A growing number of retail (private) investors are trading on the forex market as it offers the following advantages:

• Massive trading volume – this drives down trading costs and makes manipulation of the market difficult if not impossible.
• Unparalleled liquidity – easy and fast order execution with tight spreads.
• Availability of high leverage – reduces the amount of capital required to trade.
• Well publicised reporting on a variety of economic factors – helping to make the market more orderly.
• Long trading hours (24 hours on weekdays) – no risk of carrying a trade between market close and market open.

Trading Forex For a Living

A growing number of traders are moving to foreign exchange trading to escape high brokerage fees, poor liquidity and market manipulation. Many are discovering that Forex trading offers a perfect “life/work balance” as they can develop trading plans that replace their old income in fewer hours work each week.

Flexible trading hours

The foreign exchange market is available 24 hours a day from Monday morning (Australian time) through to early Saturday morning.

This means that it is a simple matter to create a workable trading plan or strategy around existing employment, family commitments or any other restrictions that would keep you from trading most other markets.

Low costs

Many traders that are learning to trade make the sensible decision to open their live trading with a small account. The problem with most markets other than Forex is that the fixed costs of trading (such as brokerage or commissions) eat into each trade making it exceedingly difficult to profit with small position sizes. Traders are left with a couple of choices – either use a different position sizing strategy in the smaller account or accept that the percentage returns will be different when they begin to trade “for real”.

Forex eliminates this problem since there are no data fees, no commissions and no brokerage to pay other than the “spread” between the buy and sell price. The enormous trading volumes in the Forex market help to make these costs small in comparison to the available profits and minimise the possibility of slippage or re-quoting of prices when you are placing your order.

Low risk

Traders are taught to use stop-loss orders to limit their maximum loss on each trade and take their emotion out of the equation when managing their trades. “Cut your losses short and let your profits run” we are told. However, in many markets you stop loss merely indicates the price at which your exit will be triggered … the actual execution price could be a long way from the trigger price.

This is especially the case for markets that have limited trading hours. Price can (and does) move dramatically against our trades while such a market is closed leaving us holding a large uncontrolled loss. This doesn’t happen in Forex!

The foreign exchange market is open 24 hours a day and the high liquidity means that our stops will be execute at, or very close to, the price we specify.

Start small

The adage “you have to walk before you can run” is as true for traders as anyone else. At WealthFX we encourage you to start small and take advantage of the low cost of Forex trading by opening your account with a starting balance that allows you to trade (and sleep) comfortably.

No limits

Now, here’s where things get exciting! As you learn and grow in confidence you will, naturally, want to start making bigger profits. This is where the Forex market really shines … the sheer volume of this market means that it is unlikely that you will want to place a trade that is too big for the FX market.

There is almost no difference markets between placing a trade for $1 and placing a trade for $1,000,000 … this is one of the reasons that the journey from beginner to full-time trader is easier in Forex than in any other market.

The only difference is the addition of a few more zeroes on the size of your trades.

Instant Execution – Get your profits fast

Last but not least … let’s talk about settlement and execution speeds. If you’ve ever watched a trading opportunity slip quietly by because you could not get your trade entered or had you bid rejected as you chased the price up the screen you’re going to love the rapid execution that you’ll enjoy when trading Forex.

Most trades are executed within a second and requoting of market orders is rare unless you are making a very, very large trade.

Get Started Now

With so much in your favour isn’t it time that you joined the multitude of satisfied traders that have made the switch to foreign exchange? We’re confident that we can help you … but only if you first make the decision to help yourself! Call for a demonstration on 1800 610 477 or fill out our contact form and ask us to call you back at your convenience.