Why You Might Want To Learn About Day Trading On The Forex Market
Why You Might Want To Learn About Day Trading On The Forex Market
Day trading had something of a heyday back in the 1990s. But, a lot of investors and speculators took a pretty bad beating trying to beat the market due to a number of factors.
For instance, in trading stock options it was easy to fall in love with a certain equity and try to leverage your position with options. The problem was the big guys could control a market and make it behave differently than it might normally do.
Then, the Forex market came along. The rules changed dramatically for a day trader in a positive way. For one thing, the market is gigantic. There is a daily trading volume exceeding $1.5 trillion. This means no one can control this market. The day trader can fare as well as the large institutional trader.
Another advantage is that lower commissions are charged versus other types of trades. If you are doing a lot of in and out trading, this can become quite significant to the small day trader. Forex is all electronic so there are not so many middlemen involved'resulting in lower commissions. In fact, it is possible to trade with no commissions. Trading fees are also minimized in the forex market.
For a day trader, strong up and down market movements are important. 80% of forex trades are speculative, and this provides all the volatility anyone could ever want. Stocks, on the other hand, tend to trade in a narrow band of once in a while making a big move up or down. It can be agonizing to wait for these very infrequent times where there is movement that a day trader can take advantage of.
A day trader can make money whether the market is going up or down in forex. This is true also with equity options, but the movement on the forex market is more of a technical nature, and, fortunately, the breakouts can be predicted better than with stock options that have a lot to do with unpredictable rumor.
All in all, there is much about forex to suggest that if you want to be day trading, this is the place to be.
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