Why Trade Forex or the Currency Market?

By: Kelvin Chan

Forex or the currency markets aren't the only tradeable markets out there in the world. There are many other markets such as the equities market (more commonly known as stocks), futures or commodities and also the options market (this is a derivative).

So why trade Forex?

It's not exactly a one way street when answering this question but it won't be long before you realise the many benefits of trading the currency markets as compared to the rest I mentioned.

I've got lots of friends who are making a good living from trading equities and options so if you're also in the same position, then do what has always worked for you.

With Forex, one of the biggest advantages is that it allows time freedom since it is traded from early Monday morning (starting with New Zealand) right up till late Friday afternoon (ending with United States). In other words, there's a 5.5 trading week. With equities, you need to wait till that particular market in which you're interested in trading opens up and times are limited.

Another major advantage for trading Forex over the other markets is because of the leverage it allows you to have. In simple words, it means you don't need to have as much money as you do in the stock market to make the same amount of profit. Do take note that leverage is truly a double edged sword though and I don't say this from an intellectual point of view. I've experienced this individually and corporately.

There are lot of other advantages but one last one that I like to mention is that it's such a huge market that manipulation in the market is literally impossible (unlike the equities). Brilliant I'd say.

Foreign Exchange
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