Top 12 Characteristics Forex Market

What is forex? is the electronic medium of which one nations currency is exchanged for that of another country

. Another question, is forex market meant for every Jack and Harry? My answer is capital NO. Forex is a market of choice for those interested in trading as a profession and have the stomach to absorb financial risk or losses. Highlighted below are the characteristics of the market.

1. Liquidity: The market is highly liquid with money on the table round the clock (24/7/365) and your profiting from the market then depends on your scheming ability.

2. Tradable: Although, many currencies inter-play in the market, but there few tradable where the big dog hits their big target. In fact, there are four (4) dominant currency pairs and you need to specialise in one.

3. Equality: There is an equal playing field. That is the profit potentials in the market is equal for all players irrespective of the market situation whether bullish or bearish.

4. Manipulation: This is the only market known to man that is not subject to price manipulation. So, there is no single person that can adjust the market price to their favour.

5. TA: In this market, pure Technical Analysis work best compare to other market analyses or indicators.

6. Investment: You need a less capital/money/cash to start-up this business in comparison with other investment channels and their return on investment.

7. Leverage: Here, you have opportunity to trade with greater leverage as oppose to other markets. The minimum leverage is 100:1 and you can trade with greater leverage provided you know how to take care of the back sword (adverse effect).

8. Expenses: This business lack unnecessary expenses such as clearing fees, forwarding, exposures etc.

9. Brokers fees: The fees of the market maker dealers are made clear at inception and no argument in whatever form.

10. Day-trading: Being a prompt or spot market, you buy and sell simultaneously and close your trade the same day. So you need not to wait for days, weeks or months.

11. Hedging: When you invoke the risk management mechanism, it is possible to size or limit your loss and/or profit depending on your expertise on trading the chosen currency pairs.

12. Demo-trading: A newbie can undergo a learning period by demo-trading for months and start real trading with mini account.

by: wallywisdom

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