ColeTrades.com

The Foreign Exchange Market, a.k.a. Forex is a market where money is the commodity traded. Traders will buy one country’s currency while simultaneously selling another country’s currency. These are known as trading pairs, some of which are the EUR/USD, the CAD/USD, and the GBP/JPY. The Forex is the largest financial market in the world with a trading volume of $4 trillion per day. (To put this in perspective, the daily volume of the New York Stock Exchange is a meager $25 billion.)

Advantages of Trading the Forex

• You can open an account with as little as $250.
• True 24 hour trading from Sunday evening to Friday afternoon.
• No commissions to be paid since the broker makes their money by the size of the bid/ask spread.
• No market maker to manipulate the prices.
  The international banking system handles the trades.
• You can get leverage as high as 400:1
  The prices are measured in pips, so with 400:1 leverage, one pip is valued at 10¢.This allows you to place trades with very little margin.
• You can use a broker located outside of the U.S.
  This is a key advantage to Forex trading. In fact, I urge anyone who trades the Forex to trade outside the U.S. Last year’s implementation of Compliance Rule 2-43 does not allow hedging of accounts by traders using U.S. brokers and enforces the First In, First Out Rule. (Suppose you have opened a position on one currency pair that is winning, and then open another position on the same pair that turns into a loser. Naturally you want to close the losing position, but with First In, First Out, you have to close the first position first which means to close the loser, you have to close the winner first. By using an offshore broker, you are not subject to these rules.)

I have been studying the Forex under the mentorship of Dan Gaub– one of the greatest minds in currency trading today. Dan is rated in the top 1% of individual Forex traders in the world and he has a real heart to teach. If you are interested in learning more about live trading with Dan, as I do, please visit my Forex page here: ColeTrade’s Forex Page. You can also gain more knowledge of Forex trading at The School Of Pipsology.