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Tuesday, April 21, 2009

Online Forex Trading Easy And Cost-effective

By John Eather

Largest world market: The largest financial market in the world is the Forex Market with an approximate USS$ 1.5 trillion trade per day. The main reason for the huge size of the market is the extreme demand worldwide for foreign currency. Central banks and international businesses thrive on International Trade as a main income sources with currency prices floated and not dependant upon gold prices. The ease of online forex trading has made the market even more attractive and lucrative.

Reasons for online trading: Online forex trading has many great advantages such starting trade with a couple of hundred US Dollars, trade twenty-four hours a day, seven day a week and no commissions payable to middlemen, making returns on capital more. Online forex trading companies generally offer high leverage ratio's to clients as an added bonus. Special trade software provides real-time news, charts and analysis as well as demo accounts for you to try your hand at trading with no risk.

Cost efficient: Using online forex trading instead of normal brokered forex trading will save you bags of money as there is no middleman fees payable-you are your own broker. However online trading will attract costs in the form of opening, managing or administrating the account as well as software.

Experience required: Experience is required if you are planning to play the foreign exchange market online. Do a course or research on foreign exchange trade as you may just stumble upon terms or transactions you are not familiar with. Please bear in mind that your are exposed to high risks with this market type. The Forex Market has high returns as well as high risk. The positive and negative must be well-balanced to be successful.

High risk: Due to the fact that foreign currency trading is conducted over-the-counter, no organised or formal market legislations or regulations are strictly applicable, opening the door for fraud, money laundering or theft. Gearing or leverage effects will have either a positive or negative impact on you as even the smallest of movement in the market will have a possible great impact on your deposit. Orders intended to reduce risk may not always be effective as they may not be executable depending on the market conditions. - 23208

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