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This is probably one of the questions that you need a
reasonable answer. There are hundreds of investments out there
that you can prefer, but why go trading foreign currencies
instead?
Forex investment is unique in various aspects.
Its trading volume is relatively huge compared to other market.
It has extreme liquidity or the capability of either buying or
selling the currency without causing significant movement in the
market price.
It has the largest number and variety of traders.
It is one of the markets that have long trading hours (24 hours
each day, except during weekends.
Trading locations are almost everywhere, not just in the United
States or major cities of Europe.
There are different factors that affect foreign exchange rate.
Another whooping fact that will make you excited to go on Forex
trading: it has an average turnover in traditional foreign
exchange market of around $1.88 trillion daily, according to the
Triennial Central Bank Survey of the BIS (Bank for International
Settlements). Here are the daily averages of turnover on the
Forex market for the last 17 years:
$500 billion (April 1989)
$750 billion (April 1992)
$1.18 trillion (April 1995)
$1.48 trillion (April 1998)
$1.16 trillion (April 2001)
$1.88 trillion (April 2004)
From the figures alone, you will notice that the average trend
of Forex turnover is increasing. It is estimated to reach as
high as 2 to 3 trillion dollars within the next 8 to 10 years,
if the number of traders around the world will continue to
increase. As a matter of fact, everyone have the chance of
getting a substantial slice of the Forex market wealth pie,
especially that the Forex trading marketing is now on its
automation process.
The concept of automation becomes the new trend to the foreign
exchange trading market. The Interbank spot Forex market has
also considered switching to the automated method as well.
There are several benefits that a Forex trader can derive from
automated Forex trading. Here are some of such benefits and
figure out why Forex trading as well as other investments
(futures and commodities) prefer the automated process.
Sponsored by online fx trading
Through automated process, transactions can now be done in real
time. Although manual systems have existed for quite some time
now, it is difficult to achieve such benefit that the automated
Forex system can offer to its traders. All of the trades can
happen within a few milliseconds and can be a big plus for
automated transactions against the manual system. In fact, there
are problems that are addressed using automated Forex trading
especially if the trader is losing a few times in a row that
prevents him from making new trades. Such problem could be
addressed using the automatic trading system.
With automated Forex trading, you will have a greater
diversification. It means that you can trade in various markets
in different time zones at a time. You can execute trades with
traders from Singapore or London even it is already 12 midnight
in the United States. This benefit allows you a multiple
exchange model option. You can use varying trading models to
evaluate short-term data. This means that you will be able to
predict the trend for a shorter period of time, let us say from
fifteen minutes to half an hour.
As previously mentioned, the Forex market is unique because of
its extreme liquidity. This liquidity is increased when the
market goes automated.
Risk management problems are solved through automated Forex
trading. International checks, which are commonly used in making
purchases on Forex market, are synchronized through automated
technology. Since the transaction in an automated process is now
on real time, there is a slim chance that the payments will be
delayed, reducing the risk of non-payment by either parties.
Although there are problems noted with the use of the automated
system, it can be fixed through consistently-updated
technologies.
With automated Forex trading market, the prediction of $2-3
trillion average daily turnover within the nest 8 to 10 years
can be changed within the next 4 to 5 years. Given the quick yet
efficient trades on varying time zones, automated Forex trading
will now be among the existing lucrative business around the
world.
Sponsored by online fx trading
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