The other day, when I wrote a brief Introduction to FOREX, I sort of promised to write about “FOREX language”, or common terms and words used in FEREX. I will try to post that real soon. But before that, let us try to understand FOREX more.

Let us look at reason.

Why would one choose to trade Foreign Currency? Particularly, why would one choose FOREX over Stock Trading? There are many reasons that I can think of. Here are some :-

1. Huge Leverage. – Unlike stock market, which most often than not offers only 2:1 leverage, FOREX brokers offers huge leverage, sometimes upto 1000:1!!

***For those who are curious enough, leverage is The ability to control large dollar amounts of a commodity with a comparatively small amount of capital. For example a 200 to 1 leverage, will enable a trader with $50 dollar margin deposit to trade $10,000 worth of currencies.

2. 24-hour market – You can trade FOREX anytime you want as at any given time, somewhere in the world, it is business hour (well, except for 2 short days during weekends). Here’s a comprehensive schedule of FOREX market around the globe

Tokyo Open (NEW YORK 7:00 pm) (GMT 0:00)

Tokyo Close (NEW YORK 4:00 am) (GMT 9:00)

London Open (NEW YORK 3:00 am) (GMT 8:00

London Close (NEW YORK 12:00 pm) (GMT 17:00)

New York Open (NEW YORK 8:00 am) (GMT 13:00)

New York Close (NEW YORK 5:00 pm) (GMT 22:00)

3. No commissions, No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers take profit in the form of spread during bid/ask. Even the spread value are so very low

4. No monopoly by any single party - The FOREX market is so huge and has so many participants that no single party however big/powerful it is, can control the market price for an extended period of time.

5. No fixed lot size.- Unlike in stock market, whose lot sizes are determined by the exchanges, in Forex, you determine your own lot size. This allows little people like you and I to trade with accounts as small as $300 or less

So, Is five reason enough to make you consider trying FOREX trading?