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Advantages of the forex markets

Fluidollar said: "I decided a while ago that I was going to move into one of the leveraged markets (futures, options, currencies) and am leaning towards trading the Forex. I've been reading a lot about the currency markets and the thing about them that appeals most to me is that they are supposedly great trending markets. Whereas stocks will often be chopping around and their price direction will seem uncertain, I've read that the currencies generally have very clear-cut trends. Another thing that appeals to me in the forex market is that the market participants aren't as competitive in the forex markets. In futures, it's typically trader vs trader or trader vs. hedge fund, but currencies have buyers and seller s who are motivated outside of just trading for profits. Banks, governments, etc. trade currencies as part of their regular business dealings. They don't necessarily do it because they're looking to profit from price swings in the currencies, but rather just want to exchange one form of money for another. Since in the currency markets its trader vs. governments, businersses, other traders, etc. and in the futures markets it's simply trader vs. trader, I'm guessing the forex markets will be less competitive. And less competition from pro's is an advantage to me. Those are my conclusions about the currency markets, but as I've never actually traded them before, the could be completely wrong. Anyone experienced with forex care to correct me?"

ratAphooey said: "i play around in forex. you got the right idea. it is mostly about trends"

AlfredSokol said: "I just wonder how small players can make money this way. Big, big companies are playing with serious money in the same field."

Fluidollar said: "[QUOTE=AlfredSokol]I just wonder how small players can make money this way. Big, big companies are playing with serious money in the same field.[/QUOTE] Well, it's the same in the futures markets, where there's the hedge funds and firms as well as the individual traders. Personally, I like to go up against big banks in Forex and consider it one of the market's greatest advantages. I'm probably repeating myself, but the "big company's" goals are different from just making a quick trading profit, or even profiting from currency fluctations at all. It's just a part of regular business to trade dollars for other currencies. The markets, therefore, are less choppy because they're not determined by traders (Who make up only 2-3% of volume) but rather by the natural forces of supply and demand."

Pb3190 said: "Are there any other reasons you don't wish to trade stocks? I have been focused on learning about the stock market, but I am also interested in the other markets. One thing about FOREX that interests me is the amount of leverage, which in my mind equates to margin. Is this assumption correct?"

ratAphooey said: "leverage is definitely what its about. plus the forex market moves fast. and its usually very liquid as compared to other investments."

Fluidollar said: "[QUOTE=Pb3190]Are there any other reasons you don't wish to trade stocks? I have been focused on learning about the stock market, but I am also interested in the other markets. One thing about FOREX that interests me is the amount of leverage, which in my mind equates to margin. Is this assumption correct?[/QUOTE] Yea that assumption's correct. The reasons I'm interested in forex are the leverage (and potential for higher gains) as well as the tendency for currencies to trend really well and clearly. The market's trending rather than being choppy is a huge advantage with technical analysis"

Pb3190 said: "The ease of technical analysis would interest me, but the leverage might turn out to be a double edged sword. While the potential for high returns exists, there is also the same potential for large losses."

justinefx said: "hi Fluidollar, Fx market provides a leverage of 1:100 and deals with an amount of 3.5trillion US dollars per day. You can get all information on forex and then go for some quick forex experience in a one month demo trial at an expense of $100. You will instantly an ebook for forex trading. Simultaneously, you can get latest FX signals and reviews from experts."

AlfredSokol said: "[QUOTE=justinefx]hi Fluidollar, Fx market provides a leverage of 1:100 and deals with an amount of 3.5trillion US dollars per day. You can get all information on forex and then go for some quick forex experience in a one month demo trial at an expense of $100. You will instantly an ebook for forex trading. Simultaneously, you can get latest FX signals and reviews from experts.[/QUOTE] What a poorly written spam message. Bone up on English before you pitch this crowd, Sparky."

sjerar said: "[QUOTE=AlfredSokol]I just wonder how small players can make money this way. Big, big companies are playing with serious money in the same field.[/QUOTE] You can't influence this market as in the stockmarket. The volumes are incredible high."

Pb3190 said: "Small players can try to do better by using high leverage, which can either make or break them. I think high leverage would be too risky, but that's just my opinion."

LongArm said: "Leverage is great if your methodology is good. If it isn't, then you'll just lose your money faster."

AlfredSokol said: "A lot of leverage might just break the back of a small investor...especially in the event of a mistake."

Fluidollar said: "[QUOTE=AlfredSokol]A lot of leverage might just break the back of a small investor...especially in the event of a mistake.[/QUOTE] Well when youre using leverage youre supposed to trade differently to protect your capital. The goal is to limit your risk but at the same time getting higher returns (obviously). So say you have an account with 100k, at any time youll only be using 20-30k (or less or more, the point is you dont go nearly all in like you would with stocks) and youd set tight paramaters on profit targets and losses. Even if you only used 20% of your 100k, and assuming you have a good strategy, you can easily make a lot more than in unleveraged markets with less risk for the reward."

sjerar said: "[QUOTE=LongArm]Leverage is great if your methodology is good. If it isn't, then you'll just lose your money faster.[/QUOTE] Exact, without good money management 1:100 leverage is killing."

justinefx said: "Hello players and traders, Everybody talking about leverages. Leverages are not all alone sufficient to raise the ROIs (especially in FX department) when the risk is above expectations. Keep trying. By the way, whats the currency pairs you guys are trading??:th_dblthumb2:"

Fluidollar said: "[QUOTE=justinefx]Hello players and traders, Everybody talking about leverages. Leverages are not all alone sufficient to raise the ROIs (especially in FX department) when the risk is above expectations. Keep trying. By the way, whats the currency pairs you guys are trading??:th_dblthumb2:[/QUOTE] shutup shutup"

Pb3190 said: "Despite having a Forex forum, I don't think too many people here trade that market. It seems a bunch of us are interested in it though."