FOREX TRADES EASILY

FOREX TRADES EASILY
The forex market offers traders free commissions, no exchange fees, online
access, and plenty of liquidity. Unlike the futures products, the forex market
uses standardized contract values, meaning that full-size positions are
valued at 100,000. The one main element that has attracted investors was
and is the commission-free trading. Plus, most forex firms require less capital
to initiate a start-up account than a futures account. In fact, investors
can open accounts on their debit and/or credit cards; and the practice still
exists of online payments through PayPal.
Some firms offer smaller-size flexi-accounts that allow traders to start
applying their skills at technical analysis with as little as $500. And there is
also the mini-account, which allows individual investors to adjust their
The Business of Trading Money 11
positions by not having too big a contract value per position, as they can
add or scale into more or fewer positions to adjust the level of leverage according
to their account size. This means that smaller-size investors are not
excluded from trading because they can participate with mini-contracts.
What is great about this feature is that a new trader or an experienced
trader who is testing a system can trade the market with real money, rather
than simply paper trading; the new traders can benefit from the actual experience
of working with money and will be able to see how they handle
the mental or emotional side of trading. People are emotionally driven.
Fear, greed, and anxiety can wreak havoc on people’s psyches. Therefore,
practice trading with smaller leverage will not make you rich immediately;
but it will help you hone your trading skills and help you develop confidence
in your methods and execution skills.
Having real money on the line certainly helps people to learn about
their emotional makeup. This is one great way to overcome the fear and
greed syndrome that many traders seem to battle. Another excellent quality
that forex mini-accounts have is that smaller-size traders can afford to
trade multiple lots for scaling out of trades in order to let a portion of their
contracts ride for a longer, more-profitable trade and still capture profits on
a partial exit.
Another attraction is that most forex companies offer free real-time
news, charts, and quotes with state-of-the-art order-entry platforms; some
even have automated order-entry features, such as “one cancels the other”
and “trailing stops.” All of these tools and order entry platforms come at no
additional charge to the trader. This market is a pay-as-you-go concept because
there are no commissions—you simply pay a premium, or a higher
spread, to buy and a higher spread to sell. Most forex dealers take the other
side of your trade. You do not have direct access to the interbank market,
as it is called. Because the forex market is decentralized, it is possible that
five different companies are showing five different prices all at the same
time within a few points (or PIPs, as they are called). Most forex traders are
short term in nature, meaning they are quick-in-and-out players. Day trading
in the forex market is beneficial for these traders due to the fact that
there are no commissions, but the PIP spreads can and do add up.
IMPORTANT FEATURE
Flexi or mini forex accounts can be set up by an individual. The main benefit is
that you can control the leverage and use smaller lot sizes, which enable you
to trade multiple contracts that will allow you to scale into and out of a trade at
various price points.