Friday, November 13, 2009

Forex Market

The forex market is open 24 hours a day, 5 days a week. Because of the decentralised clearing of trades and overlap of major markets in Asia, London and the United States, the market remains open and liquid throughout the day and overnight.
The foreign exchange market is the most liquid market in the world eclipsing all others. In comparative terms, daily volumes are more than 40 times that of the Dow Jones Index.
One consistent margin rate 24-hours a day allows forex traders to leverage their capital more efficiently.
No restrictions on type (market, limit or stop orders) or timing of trades.
No restrictions. Very low account balances, due to leverage/margin strategy. Lower client account requirements.
Traditional Market place:
Limited trading hours; trading times restricted to “local” market which decreases the attractiveness of the market for overseas investors.
Threat of limited liquidity, stocks are particularly vulnerable to large price fluctuations in after-hour markets or when trading smaller corporate issues.
Large capital requirements, high margin rates, restrictions on shorting, very little autonomy.
Short selling and stop order restrictions.
Pattern day traders subject to restrictions requiring a substantial amount of cash on account prior to trading.

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