Read Forex Course part 1:

The Advantages of Forex Trading

This is also why so many people get into it in the first place. It has a lower margin except that you have the ability to control a large amount of the currency with little money put out. but, the margin needs for trading futures are usually around 5% of the full value.

It is much cheaper cause there is no commission or fees. When you trade in futures, you have to pay exchange and brokerage fees. That is not the case with trading forex. This is far better for you. Currency trading is a worldwide bank to bank market that lets buyers and sellers get matched right away. With futures and stocks, you could wind up spending an arm and a leg. Why not go the cheaper and more lucrative route.

When you are trading futures, you can end up risking quite a bit of money. For example, in October pumpkins often go up, but what if there is a economic problem that changes that? You would not have been able to leave your position and this could have wiped out the entire equity in your account as a result of that one problem. This doesn’t happen with forex trading as you are dealing with currency the basic cost of the currency doesn’t really change it only goes up in value or down but not enough to bottom out.

Analyzing Your Forex Strategies

Technical analysis and fundamental analysis are the two basic areas of strategy to use when it comes to the FOREX market. There is a difference however, and that difference is that technical analysis is by far the most common strategy that is used by individual FOREX traders. Of course how would you know unless I explain both methods. That is what I will do now so that you can choose the right strategy for you.

If you think it’s hard enough to value one company over another, you should try valuing a whole country instead. This is what fundamental analysis in the forex market is. The primary purpose of it is to. This method is generally for those who want to predict long-term trends in the marketplace. But it is important to mention that some traders do trade short term strictly on news releases.

Technical analysts don’t look at the market as a whole, they look at price trends. The only real difference between technical analysis in FOREX and technical analysis in equities is how long this whole process takes. This will be substantial because the market is open 24 hours a day. Because of this, some forms of technical analysis have to be changed so that they can work directly with the 24 hour FOREX market.

Part 3 will be published tomorrow.

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