Advantages for parties wishing to trade in the FOREX Thursday, September 07, 2006
Liquidity: In the FOREX market there is always a buyer and a seller! The FOREX absorbs tradign volumes ad per trade sizes which dwarfs the capacity of any other market. On the simplest level, liquidity is a powerful attraction to any invester as it suggests the freedom to open or close a position at will 24 hours a day.
Once purchased, many other high-return investments are difficult to sell at will.FOREX traders never have to worry about being "suck" in a position due to lack of market interest. In the 1.5 trillion U.S. dollar per day market, major internationsl banks a "bid" (buying) and "ask" (selling) price.
Access: The FOREX is open 24 hours daily from about 6:00 P.M. Sunday to about 4:00 P.M. Friday. An individual trader can react to news when it breaks, rather than waiting for the opening bell of other markets when everyone else-has the same information. This allows traders to take position before the nes detailks are fully factored into the exchange rates. High liquidity and 24 hour trading permit marked particianats to take position or exit regardless of the hour. There are FOREX dealers in every time zone, United States, etc.) willing to continually quote by and sell pricises.
Since no money is left on the market "table" this is what is referred to as "ero Sum Game" or "Zero-Sum Gain". Providing the trader pics the right side money can always be made.
Two-way Markets: Currencies are traded in pairs, for example doller/yen, or doller/swiss franc. Every position involves the selling of one currency and the buying of another. If a trader believes the Swiss franc will appreciate against the Doller, the trader can sell dollars and buy francs("selling short!"). If one holds the opposite belief, that trader can buy dollars and sell Swiss francs("buying long"). The potential for profit exists because there is always movement in the exchange rates(Prices).
FOREX trading permits profit taking from both rising and falling currency values in relation to the doller. In every currency trading transaction, one of the sides of the pair is always gaining and the other side losing.
Comments
0 Comments:
Post a Comment
<< Home