If I am day trading the stock and futures market, why would I want to move into day trading the forex as another additional trading avenue? Are there any special features of day trading the forex market that appear more appealing to stock traders to attract them to trade the forex as well?
In the pursuit of prosperity, we are always looking for ways to create personal wealth, and day trading forex offers much more opportunities to create wealth than say trading stocks and shares and commodities. Why is this so?
Forex Markets open 24/7
The stock markets and the commodity markets have set times that they are open for trading. In contrast, the forex markets are open 24hours a day, seven days in the week, giving much more trading opportunities to the day trader to trade. At the same time, convenience is a key factor, as anyone can trade at any convenient time with a web based trading platform provided free by his forex broker.
Higher Liquidity
The day trader is always conscious of liquidity. It is liquidity that allows a day trader to move smoothly into a day trade instantaneously at the best identified price without lag which will lead to a poor executed price. When he wants to buy, the day forex trader is able to get into that trade almost instantaneously due to the higher liquidity in the forex market and when a day trader wants to sell, he can get out of the currency at his price without delay. Where the difference in a fraction of a cent is important, this characteristic of very high liquidity makes forex trading very attractive. More so, it has been proven that there are trading systems that allow day traders to trade for only an hour or two, freeing them to do whatever they like for the rest of the day after pocketing profits. These are day traders who professionally trade for a living.
Lower Trading Costs
Forex trading seems like a dream to many day traders because there are no exchange fees, no commissions paid to brokers, and low transaction fees. In contrast, the day traders in stocks and shares and futures market all incur fees and commissions paid to licensed dealers and brokers, all of which will result in less profits.
Ability To Earn From Referrals
The active day trader can enter into arrangements with some forex brokers to earn a referral commission from the trades of people he introduces to the forex broker. Now while this is another separate activity, it cannot be denied that this is an added advantage for a day trader to earn something extra from his efforts in introducing or recommending friends to trade as well.
All these features make day trading the forex an attractive and possible replacement income source for those who work from home trading for a living.
By Peter Lim
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