24-Hour Trading
The currency market\'s are open without interuption for 24-hours per day. Each week, FX Trading opens access to the Forex markets at 5:30 p.m. Sunday,New York time, as markets open in Sydney and Singapore. At 7 p.m. the Tokyo market opens, followed by London at 2 a.m., and finally New York at 8 a.m. Because the Forex markets are open around the clock, FX traders have the flexibility of determining their trading day. The 24 hr nature of the market allows Forex traders to capitalize on global economic news releases. At 2 AM EST, as Asia is releasing its economic data, Forex traders are able to enter the market while equities traders are left standing by.
Commission Free. Unlimited Trades
With FX Trading, you pay no commissions and no exchange fees with our purely electronic online platform. This eliminates middleman brokerage fees. In Forex, there is still a cost to initiating the trade, but that cost is incorporated into the bid/ask spread- which is also present in all markets including futures or equities trading. FX Trading offers industry low bid/ask spreads, passing the savings onto our clients. Our spreads are fixed and fully transparent. The costs of Forex and FX Trading are lower than any other market.
Active stock traders pay large portions of profits to brokers in the form of commissions, and the exchanges in the form of exchange and data fees. In Forex, traders do not pay these fees. While equity brokers may advertise enticing commissions, the spread between the bid and ask is not fixed and may vary with market conditions, particularly with smaller less liquid stocks. This spread results in an added hidden transaction cost much greater than the stated discount commission rate. FX Trading offers fixed bid/ask spreads, allowing clients to enter the market fully aware of the costs.
Instant Execution
Unlike Forex, equities do not offer instant execution or price certainty. Even with electronic trading, the price for fills on market orders is very uncertain. In the equities market, price quotes often represent the LAST trade, not necessarily the current price [the price which the order will be filled at]. With FX Trading, all prices in the dealing rates window represent points where traders can buy/sell the currency pair.
*Under normal market conditions.
Short-Selling Without an Uptick
Unlike the equities market, there is no restriction on short selling in the Forex market. A trader may enter the Forex market regardless of whether the trader is long or short, or which way the market is moving. Since Forex trading always involves buying one currency and selling another, there is no structural bias to the market. Hence, a trader has an equal access to trade in a rising or falling market.
400:1 Leverage
Forex traders are able to leverage their equity, empowering them to capitalize on market movements and make more significant returns. Unlike stocks which only allow 2:1 leverage and futures that offer a maximum of 50:1 leverage, FX Trading offers leverage as high as 400:1. With 400:1 leverage, a trader only needs $250 of equity to open each standard $100,000 lot. These $250 are refered to as their initial margin deposit. If a trader correctly predicts a 1 penny movement of the GBP/USD, they\'ll make a $1,000 gain from their $250 initial margin deposit. From a 1 cent movement, the trader made a 400% return off of their initial margin! The Forex market regularly moves several cents, presenting many opportunities for traders to make significant gains.
Negative Balance Protection
Forex presents an entirely unique risk to reward ratio. Unlike other leveraged markets, our FX Trading Platform offers negative balance protection. With leverage in the futures and equity markets, a client may lose significantly more than their initial invested equity. In these markets, you may make $20,000 from a $2,000 investment, but you may also lose $20,000 with that same investment. In Forex, the trading system is set to close open positions as your total equity approaches zero. At $500 of remaining equity in a standard account and $50 of remaining equity in a mini account, our system will close your positions. Remember that leverage in any market will accelerate both your losses and gains. However, in Forex, negative balance protection means the potential reward is unlimited and the potential loss is limited to your initial investment.
Making the Transition to Forex
Equity markets can be used as a key indicator for movement in the Forex market and should be watched. Investing in global equity markets has become far more feasible today as technology has enabled greater ease with respect to transportation of capital. Accordingly, a rallying equity market in any part of the world serves as an ideal opportunity for all. The result of this has become a strong correlation between a country\'s equity markets and its currency: if the equity market is rising, investment dollars flow into that country to seize the opportunity. Alternatively, falling equity markets will have domestic investors selling their shares of local publicly traded firms only to seize investment opportunities abroad.
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