Forex Advantages
After you have learnt about the forex market in general, and found yourself interested in the Forex market, it is time to learn about the technical concept of Forex Advantages. One most important thing is the margin. The margin here is used by the traders to control a larger amount of currency from the position they have taken. In the Forex market, the margin is something that can be an advantage compared to the futures and stock trading. In Forex, a trader can play 5 times value as in the future trading, and 50 times as in the stock trading.
If you take a position in a futures trading, the margin requirements needed are usually 5% of total value of the holding, and it is even bigger for stock trading, which is 50%. While in Forex Advantages, the margin requirements are only about 1%. For instance, for every $100,000, the margin required is only $1000. That’s why the margin in the Forex market can be your profitable advantage. However, you should not only see it one way, you also need to understand all the possible risks in the Forex market trading.
To help you understanding the system, here’s the illustration. In Forex Advantages, you would have a 3 point spread for a JPY/USD ( Japanese yen/ US Dollar) pairs, which worth around $30. But if you are in JY futures trading, the spread is only 1 point or worth $10. However, the broker’s commission is still be charged. For self-directed online trading, it can be as low as $10, or as high as $50 for full-service trading. However, this pricing is generally all-inclusive pricing. By knowing this, it would be wise if you can compare both online forex and a particular commission charge, so that you can see which commission is the greater one.
If you just read this once, you may find it complicated. To speak frankly, it is a bit complicated because Forex market trading is a technical market. But if you put more time and effort to learn really well about Forex market trading, you can get great advantages as the result.
Bookmark/share this article with others:If you take a position in a futures trading, the margin requirements needed are usually 5% of total value of the holding, and it is even bigger for stock trading, which is 50%. While in Forex Advantages, the margin requirements are only about 1%. For instance, for every $100,000, the margin required is only $1000. That’s why the margin in the Forex market can be your profitable advantage. However, you should not only see it one way, you also need to understand all the possible risks in the Forex market trading.
To help you understanding the system, here’s the illustration. In Forex Advantages, you would have a 3 point spread for a JPY/USD ( Japanese yen/ US Dollar) pairs, which worth around $30. But if you are in JY futures trading, the spread is only 1 point or worth $10. However, the broker’s commission is still be charged. For self-directed online trading, it can be as low as $10, or as high as $50 for full-service trading. However, this pricing is generally all-inclusive pricing. By knowing this, it would be wise if you can compare both online forex and a particular commission charge, so that you can see which commission is the greater one.
If you just read this once, you may find it complicated. To speak frankly, it is a bit complicated because Forex market trading is a technical market. But if you put more time and effort to learn really well about Forex market trading, you can get great advantages as the result.
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