On
the FOREX, there are only 4 major currencies.
This allows a trader to focus and concentrate
on those currencies to trade. In the equities
market, there are over 1,000,000 stocks to choose
from. Which stocks do you choose?
24-Hour
market
On the Forex market, no need to wait for the opening bell, subject to available liquidity, the trading desk is open from 5:15 PM ET Sunday afternoon through 4:00 PM ET Friday afternoon.
Trading potential
in both rising and falling markets
Trading potential exists in the
currency market regardless of whether a trader
is long or short, or which way the market is
moving. Since currency trading always involves
buying one currency and selling another, there
is no structural bias to the market.
This means
a trader has an the same trading potential
in a rising or a falling market.
On the stock market, you can earn money mostly
during a period of a booming economy, when the
stock market goes up.
But economic development is cyclical - and periods
of growth will eventually be replaced by periods
of recession. When the stock market is going
down, volatility and liquidity reduce, and it
is more difficult to profit from it.
Forex can be perfect for Technical Trading.
The strong trends that foreign
currencies develop is a significant advantage
for technical traders. Unlike stocks, currencies
rarely spend much time in tight trading ranges
and have the tendency to develop strong trends.
A technically trained trader can easily identify
new trends and breakouts, which provide multiple
opportunities to enter and exit positions.
Commission
Free Trading*
FXTSP charge no commissions or
transaction fees to trade spot currencies exchange
online or over the phone. In the equity markets,
you must pay both a commission and a spread.
Because the currency market offers round-the-clock
liquidity, you receive tight, competitive spreads
both intra-day and night. Stock traders are
more vulnerable to liquidity risk and typically
receive wider trading spreads, especially during
after hours trading.
The FCM and IB are compensated for their services through the spread between the bid/ask prices.*
High
Leverage*
Trading
forex with FXTSP gives you up to 100 times the
leverage of trading stocks. In stocks, for every
$1,000 cash you invest, you control a maximum
of $2,000 worth of stocks. The leverage is 2
to 1. But with forex, if you invest $1,000 margin
on a foreign currency trade, you can control
up to $100,000 in currencies.
This is very useful to short-term day traders who need the enhancement in capital to generate quick returns. However, leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains. To help manage your risk, FXTSP offers a unique margin watcher feature, which is embedded in the platform. If the equity in your account drops below the margin required to maintain your open positions, the dealing desk will close all open positions.
*Leverage without proper risk management, this high degree of leverage can lead to large losses as well as gains.
Required
Capital
The minimum amount needed
in order to open a trading account with FXTSP
on the Forex market is $2,000USD or $300 for
a mini account.
Forex
makes Money on Interest News
Any significant news regarding
interest rates directly impacts the international
financial markets. In the past, when a country
has raised its interest rate, its currency strengthens
relative to other currencies as investors shift
assets to gain better returns. The influence
of stock markets has changed this equation since
increasing interest rates are typically bad
news for the stock markets. Investors transfer
money out of the stock market when interest
rates rise, which can cause the currency of
the country to weaken on the broader markets.
Determining which effect will
dominate can be difficult, but there is typically
a consensus in the marketplace as to what a
rate change will do. Rate changes are typically
anticipated since they usually take place after
regularly scheduled meetings of central banks.
Indicators that typically have the biggest impact
on interest rates are PPI, CPI, and GDP.
