Why Forex Might Be For You

If you've decided to branch out of the American active trading arena, one enticing market is forex. Forex trading not only introduces you to currency trading, but it also extends the available offerings in a way that no after-hour trading can rival.

Because forex includes all of the world's currencies, the market does not adhere to the strict trading hours of the NYSE or NASDAQ.

Forex trading operates 24 hours a day, five days a week.

Why Consider Forex As Part Of Your Active Trading Regimen

1. Largest market in the world 2. Most liquid market in the world 3. Most fluid market in the world 4. 24 hour trading: 5pm EST Sunday through 4pm EST Friday 5. Not controlled by central governing body/No central marketplace 6. No commission 7. Customizable lot sizes (same execution costs can be set for minor, 3 figure trades or colossal 11 figure trades) 8. No uptick rules 9. Automatic margin calls 10. Public and instantly disseminated information

In other words, if you want exposure to the most unique market available, with unmatched benefits, forex is an obvious solution.

As with all trading, risk management is essential for success in this occupation. Because forex is so unique, it does come with its own set of circumstances that are not found in other trading arenas.

Related Link: U.S. Dollar Broadly Higher

"Minor" Points To Never Forget In Forex Trading

Currencies trade in pairs. Therefore, you will always be long one currency and short the other.

Currencies are calculated to the pip (the fourth decimal place, or, 1/100th of 1 percent) except for the Japanese yen, which is calculated to the second decimal place.

The most liquid currency pairs are called "majors" and include: EUR/USD, USD/JPY, GBP/USD, USD/CHF. The next most liquid currency pairs are commodity pairs, including: AUD/USD, USD/CAD, NZD/USD.

Every currency in the world carries an interest rate. "Carry" trades are executed as the most popular trade in the Forex because of this characteristic. Carry trades involve going long on the high interest rate of a pair (with the second entity having a low interest rate).

For the nimble active trader, forex can open doors that other markets simply cannot compete with. The size, volume and scope of forex makes this market the most accessible and potentially profitable market in the world. However, this risk-laden trading necessitates discipline and strict engagement. Proceed with caution.