In conclusion of this short presentation of Forex, we can define the main causes of popularity of this market among both professional and amateur investors.
Liquidity. This market can absorb such daily trading volumes as to surpass the capacity of any other market. High liquidity is a powerful attractive force for any investor, because it provides freedom to open or close a position of any size at a current market rate.
Continuous access. The 24-trading is an important attraction. The Forex participants do not have to wait to react to any event, as is usual with many other markets.
Flexible control. A position on Forex may be opened for just the period of time desired by the trader.
Cost. Forex traditionally does not have any commissions exept for natural market spread between bid and ask.
Unambiguous quotations. The majority of trades may be executed at a uniform market price because of the high liquidity of the market. It allows to avoid the instability inherent to futures and other currency investments where only limited amounts of currencies may be sold at the market rate at a given time
Thursday, January 22, 2009
Traders without bounds
Just three months ago bankers, brokers and financial traders were perceived by the majority of Russian citizens as space aliens. The future appeared set for many years ahead. Then the crisis made some corrections. For the first time in seven years employment agencies became flooded with the former "celestial beings".
A series of publications was issued by several financial industry magazines saying that highly qualified financial professionals would get to do things unfamiliar to them. This situation should not be overly dramatized, though. The former participants of the securities market can apply their knowledge and experience to world currency market as Eugene A. Sokolinsky, the director of "Akmos Trade" (http://www.akmos.ru) dealing center thinks.He says:
An article by A. Zaitsev "Should you trade futures on the Internet?" appeared in "RCB" magazine 16'98. I would like to express my disagreement with a few of his ideas.
A series of publications was issued by several financial industry magazines saying that highly qualified financial professionals would get to do things unfamiliar to them. This situation should not be overly dramatized, though. The former participants of the securities market can apply their knowledge and experience to world currency market as Eugene A. Sokolinsky, the director of "Akmos Trade" (http://www.akmos.ru) dealing center thinks.He says:
An article by A. Zaitsev "Should you trade futures on the Internet?" appeared in "RCB" magazine 16'98. I would like to express my disagreement with a few of his ideas.
INTERNET BUSINESS IS NOT A CAR RIDE
We trade on FOREX foreign currency exchange. Instead of futures we deal with another financial instrument, but from the point of view of trading technology they don't have significant differences, thus all further comments concerning FOREX are equally applicable to the futures. I respectfully quote the author:
A professional trader should analyze the situation continously, he should be concentrated, attentive, and decisive. Can you do it behind the steering wheel?
Unfortunately, other things are also hard to do behind the steering wheel, scratch your back, for example.
Let us compare trader's work on FOREX or futures market over the Internet with the work in a dealing room, whose advantages are often mentioned by my opponent.
Generally speaking, in my opinion, it is best to trade "on the floor" through your own broker on all world currency exchanges with a deposit of a few million dollars. There is no time lag in this case, but it is cost prohibitive to many people. You can also establish a dealing center at home. If you install a satellite dish on your patio, pay Reuters Tenfore or CQG for their services, that would be around $1,500 a month, you could get a rather decent information system, lacking, though, the ability to participate in the trading directly. Traders don't usually spend that much. That is why we should face the reality and come back down to our wicked earth from heaven
A professional trader should analyze the situation continously, he should be concentrated, attentive, and decisive. Can you do it behind the steering wheel?
Unfortunately, other things are also hard to do behind the steering wheel, scratch your back, for example.
Let us compare trader's work on FOREX or futures market over the Internet with the work in a dealing room, whose advantages are often mentioned by my opponent.
Generally speaking, in my opinion, it is best to trade "on the floor" through your own broker on all world currency exchanges with a deposit of a few million dollars. There is no time lag in this case, but it is cost prohibitive to many people. You can also establish a dealing center at home. If you install a satellite dish on your patio, pay Reuters Tenfore or CQG for their services, that would be around $1,500 a month, you could get a rather decent information system, lacking, though, the ability to participate in the trading directly. Traders don't usually spend that much. That is why we should face the reality and come back down to our wicked earth from heaven
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