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Wh is it that traders around the world see the Forex market as an investmen opportunity? We will try to answer this question in this article. Also w will discuss come differences between the Forex market, the stocks marke and the futures market. Some of the benefits of trading the Forex market are: Superior liquidity. Liquidity is what really makes the Forex market different from othe markets. The Forex market is by far the most liquid financial market i the world with nearly 2 trillion dollars traded everyday. This ensure price stability and better trade execution. Allowing traders to open an close transactions with ease. Also such a tremendous volume makes it har to manipulate the market in an extended manner. 24hr Market. This one is also one of the greatest advantages of trading Forex. It i an around the click market, the market opens on Sunday at 3:00 pm EST whe New Zealand begins operations, and closes on Friday at 5:00 pm EST whe San Francisco terminates operations. There are transactions in practicall every time zone, allowing active traders to choose at what time to trad Leverage trading. Trading the Forex Market offers a greater buying power than many othe markets. Some Forex brokers offer leverage up to 400:1, allowing trader to have only 0.25% in margin of the total investment. For instance, trader using 100:1 means that to have a US$100,000 position, only US$1,00 are needed on margin to be able to open that position. Low Transaction costs. Almost all brokers offer commission free trading. The only cost trader incur in any transaction is the spread (difference between the buy an sell price of each currency pair). This spread could be as low as 1 pi (the minimum increment in any currency pair) in some pairs. Low minimum investment. The Forex market requires less capital to start trading than any othe markets. The initial investment could go as low as $300 USD, depending o leverage offered by the broker. This is a great advantage since Fore traders are able to keep their risk investment to the lowest level. Specialized trading. The liquidity of the market allows us to focus on just a fe instruments (or currency pairs) as our main investments (85% of al trading transactions are made on the seven major currencies). Allowing u to monitor, and at the end get to know each instrument better. Trading from anywhere. If you do a lot of traveling, you can trade from anywhere in the worl just having an internet connection. Some of the most important differences between the Forex market an other markets are explained below. Forex market vs. Equity markets Liquidity FX market: Near two trillion dollars of daily volume. Equity market: Around 200 billion on a daily basis. Trading hours FX market: 24hr market, 5.5 days a week. Equity market: Monday through Friday from 8:30 EST to 5:00 EST. Profit potential FX market: In both, rising and falling markets. Equity market: Most traders/investor profit only from rising market Transaction costs FX market: Commission free and tight spreads. Equity market: High Commissions and transaction fees. Buying power FX market: Leverage up to 400:1. Equity market: Leverage from 2:1 to 4:1. Specialization FX market: most volume (85%) is made on major currencies (USD, EUR, JPY GBP, CHF, CAD and AUD.) Equity market: More than 40,000 stocks to choose from. Forex market vs. Futures market Liquidity FX Market: Near two trillion dollars of daily volume. Futures market: Around 400 billion dollars on a daily basis. Transaction costs FX market: Commission free and tight spreads. Futures market: High commissions fees. Margin FX market: Fixed rate of margin on every position. Futures market: Different levels of margin on overnight positions tha day time positions. Trade execution FX market: Instantaneous execution. Futures market: Inconsistent execution. All this makes the Forex market very attractive to investors an traders. But I need to make something clear, although the benefits o trading the Forex market are notorious; it is still difficult to make successful career trading the Forex market. It requires a lot o education, discipline, commitment and patience, as any other market. ©2005 - All Rights Reserved