Forex Day Trading – Facts on Forex Day Trading

A day trader is any kind of trader who makes several trades per day, through buying, selling, entering and closing out a trade in the same day. When it comes to day trading this is the thing instead of trading stocks; Forex traders buy and sell currencies.

This type of trading is normally referred to as simply Forex trading. All traders whether those trading in stocks or currencies have a characteristic of attempting to increase their return by taking advantage of small price on stocks or low rate on currency changes. Unlike buying of stocks where you buy stocks from a company and wait over the years for the company to grow so that your value on stock increase, this is not an investment where you make and leave it alone to grow. It won’t grow; this is because exchange rates fluctuate very quickly.

Some people do it as a hobby others while others make a career out of it. These professionals need to be intelligent and well educated people to be able to understand the trends and charts that make forecasting possible. And also because there is no central physical market; this can be carried out all through out, be it at night or during the day.

In this world there are no exchange fees, no commissions to be paid to brokers and there is low transaction fees.

It’s the same as in the futures market apart from the fact that the liquidity is higher and the costs lower. This can be a bit risky or profitable, exciting or frustrating but one thing about doing this is that it is never boring.

Forex trading versus trading stocks
– Low minimum investment
Trading currencies requires a lot less starting capital than trading stocks.

– Leverage
Forex trading offers greater buyer power than trading stocks

-Low currencies to trade
There are only a few major currencies, whereas in the equities market there are tens of thousands of possible stocks to trade.

– Free trading program with real-time charts and news
Free online trading system with streaming, real time charts, news and commentary relevant to the currency market.

– No commissions for transaction fees
Day trading and the trading stocks get compensated from bid/ask spread.

– No trading restrictions in falling markets
There are no restrictions to sell currencies short, unlike stocks which have to be sold short on an up tick rule.

Author: Mathieu Delaborde
Article Source: EzineArticles.com
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