Why Forex

Always Bull Market

Unlike the equity market, there is no restriction on short selling. Profit potential exists in the currency market regardless of whether a trader is long or short, or which way the market is moving. Since currency trading always involves buying one currency and selling another, there is no structural bias to the market. There are also great risks when trading forex and you should only invest risk capital you can afford to lose.

No Commission

FXPrice charges no commission or transaction fees to trade spot currencies exchange online or over the phone. FXPrice/FXSolutions are compensated through a portion of the bid/ask spread. In the equity market traders must pay a spread and a commission. The over-the counter structure of the forex market eliminates exchange and clearing fees, which in turn lowers transaction costs. Costs are further reduced by the efficiencies created by a purely electronic market place that allows clients to deal directly with the market maker, eliminating both ticket costs and middlemen.

Flexible Leverage

FXPrice allows greater leverage than the equities, futures or options market. FXPrice trading platform was designed to effectively monitor and control risk exposure in real time with an extreme degree of precision. Traders can utilize 10:1 leverage (or even greater). Leverage is a double-edged sword. Without proper risk management this high degree of leverage can lead to large losses as well as gains.

High Liquidity

The spot Forex market is a $1.9 trillion daily market (source: Bank for International Settlements, September 2007), 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 any other market. If you compare this to the $30 billion per day futures market it becomes clear that the futures markets provide only limited liquidity.

Uncorrelated to the stock market

A trader in the Forex market involves selling or buying one currency against another. Thus, there is no correlation between the foreign currency market and the stock market. Bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying the currency against other currencies. Conversely, if the outlook is pessimistic, we have a bull market for other currencies and traders take profits by selling the currency against other currencies. In either case, there is always a good market trading opportunity for a trader.

Inter-bank market

The backbone of the Forex market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organized exchanges to serves a central location to facilitate transactions the way the New York Stock Exchange serves the equity markets. The Forex market operates in a manner similar to the way the NASDAQ market in the United States operates, thus it is also referred to as an over the counter (OTC) market.

No one can corner the market

The Forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived. Thus central banks are becoming less and less inclined to intervene to manipulate market prices.