Sunday, September 05, 2010
   
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Why Trading Forex ?

24-hour Market

The Forex Market is always open.  You can trade on the market 24 hours a day during every business day.  This is much more convenient than the NYSE and can offer you a lot of opportunities if you trade from various time zones around the globe.  It doesn't matter if you use Pacific, American, European, or Asian sessions as you will have the ability to formulate the perfect strategies because you will be watching trades happen in real time.  You never know when a political or economic change will occur so you will be able to react to those changes instantly.

Liquidity

It doesn't matter if you are using short or long trades because the liquidity of the Forex Market will give you a lot of freedom.  This freedom enables you to open and close trades whenever you like.  There is over 3 trillion dollars of daily volume in the Forex Market each day making it the most liquid market on Earth.

Leverage

Leverage is used by private investors as well as multi-national corporations and is a type of loan that you get through your market account.  This is absolutely essential for Forex traders because currency is usually traded in units of 100,000.  You can get leverage in different ratios but the most common are 200:1, 100:1, and 50:1.  Sometimes you can find a broker that will give you 400:1.  To get a better understanding of how leverage works, if you have a 100:1 ratio and $1000 in your account you will be able to trade with $100,000.  This enables you to get much better profits but can also increase your risks.

Easy Access

These days almost everyone has the Internet at home, on a mobile device, or at work.  The abundance of the Internet has opened up the Forex market for investors of all skill levels because they can trade online quickly and without any hassles.

Trade with no Commissions

Many Forex trading companies will nail you with commissions or some other kind of fees.  We don't think that's the best way to treat our investors.  When you use our VanTrade platform, you will never be charged commission. 

Instant Execution of Trades

When using VanTrade, the trading platform from Vandior, you will get real time quotes so the prices you are looking at will be exactly the same as the orders you execute.  This guarantees that there will be no price differences between the time you see a price and the time the order goes through.  Even the smallest variation can cost a lot of money if you are making a large trade.

Short Sells

Just like the securities market, the Forex market focuses heavily on short sales.  It doesn't matter if the price is dropping or skyrocketing, if you know where to look, you can always find a great trading opportunity.  The Forex market utilizes buying and selling the different currencies which lets you trade in the rising and falling markets.

Diversification

The world is going through a severe economic whirlwind right now so a wise investor should realize that they need to spread their investments around to decrease risk.  This diversification increases the overall profits in the portfolio.  If you invest mainly in securities, you are taking a very large risk so it's always a good idea to invest in many different areas and not limit your portfolio to just one area.

Hedging the Currency Risk

The Forex market enables you to protect your investment by hedging the currency risk.  What this means is that you can designate certain stop points related to any currencies you are investing in.  A good example of this is:  You buy at 35.79 and hedge the risk by setting a marker that will sell automatically if this currency drops to 35.70.  This helps prevent large losses if a sudden fluctuation in price occurs.  Most traders spread their investments across numerous currencies so even if you do lose a little in one area, you more than make up for it somewhere else.

Interbank Market

The Interbank Market is the structure that holds up the Forex market.  This consists of a worldwide network of banks, dealers, and brokers that communicate instantly with each other over high-speed systems.  The Forex market isn't centralized like stock markets so all of the exchange rates are set by the market makers themselves.  Currency prices are influenced heavily by UBS, Barclays Capital, Citigroup, and Deutche Bank because of the sheer volume of trades they make at any time.  This volume can be billions of dollars at a time.

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