Frequently Asked Questions

Q. Is the Forex Only for Wealthy Investors?

Answer:

No you do not have to be wealthy to trade the Forex. Until the late 1990's, only large financial institutions dominated the Forex market and at that point it truly was a rich mans market. However, over the last several years the market has witnessed a dramatic evolution, with independent firms offering access to the Forex market via internet-enabled trading platforms. Individual investors are now tapping into the FX market, with access to the same market data and tools used by institutions, hedge funds and professional traders. In most cases one can open an account with as little as a few hundred dollars.

Q. How Many Hours a day Will I Have to Devote to Trading?

Answer:

The amount of time you spend trading is solely up to you and is generally dependent upon a combination of your trading system and your personality. Some people choose to trade off of the shorter time frames while others prefer the larger time frames. For those who trade off of the shorter time compressions it will most likely require daily attention. For individuals who trade off of the larger time frames, i.e. the daily, weekly, and monthly charts etc, they may only look at the charts a few times a week.

Q. Will I be able to Quit my Job and Live Off of my Gains?

Answer:

The very last thing that we want to convey is that you will become a millionaire over night by trading the Forex. The Forex market is not designed to be a get rich quick opportunity. True there are some who have done this but many more who have not. It is our feeling that the Forex offers the disciplined and responsible investor an excellent opportunity to grow their accounts principle on a steady and consistent basis. If traded properly over a period of time it is not unreasonable to think that one can make significant financial gains to their account.

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Trade on a 24-Hour Market:

The Forex is a true 24-hour market, traded continuously from 5:00 P.M. ET on Sunday to 5:00 pm on Friday est. With three distinct trading sessions in the US, Europe and Asia, you can trade on your own schedule.

Up to 200:1 Leverage:

With more buying power, you can increase your total return on investment with less cash outlay. Of course, increasing leverage also increases risk. With $1,000 cash in a margin account that allows 200:1 leverage (.5%), you can trade up to $200,000 in notional value.

When traded properly with stops in place this massive amount of leveraging allows for the possibility of large percentage gains on your account with minimal risk.

Commission Free Trading:

Most Forex is commission free and does not involve additional transactions fees to trade currencies online or over the phone.

Combined with the tight, consistent, and fully transparent spread, Forex trading costs are lower than those of any other market. The brokers are compensated for theirs services through the bid/ask prices.

Limited Pairings:

More than 85% of all daily transactions involve only 7 currencies and out of these seven there are only four major pairings. As opposed to the approximately 4,500 stocks listed on the NYSE.

These seven currencies are commonly known as the Majors, and include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. The limited number of pairings allows traders to selectively focus on a handful of major crosses instead of hundreds of different stocks.

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