| Most people are looking for the perfect way | | | | intimate knowledge of their market, they know |
| to invest their money. No one will argue | | | | what are the most likely stop and limit |
| against the fact that your money is only | | | | targets that have been set by the retail |
| going to grow by any reasonable amount if you | | | | traders through their brokers. This means |
| have invested in some type of market. The | | | | that they can flush out the retail trader by |
| first piece of advice usually given is that | | | | gunning for their stops and taking small |
| they should take advantage of whatever is | | | | incremental profits from the market. Once |
| offered by their employers 401k plan, if that | | | | the small traders have been flushed out of |
| is an option for them. This is good, sound | | | | the markets by having their stops hit, the |
| and advice and should be followed if at all | | | | market can continue to move in its original |
| possible. | | | | direction. Sadly, many of the retail traders |
| | | | may have been right in their opinion of the |
| However, many people either dont have the | | | | direction the market was headed, but they are |
| option of investing in a 401k, or they have | | | | now out of the market because their stops |
| maxed out their 401k contributions and are | | | | have been hit. |
| looking for a good place to invest their | | | | |
| additional funds for maximum growth. For | | | | An alternative to consider to all of the |
| obvious reasons (ie terrible perfomance), | | | | above investment options is to trade the |
| traditional savings accounts and CDs are out | | | | Forex market. The Forex market is the |
| of the question. These people are usually | | | | global, electronic, decentralized trading of |
| advised that investing in mutual funds is the | | | | the worlds major currencies. In the past, |
| only practical, safe alternative to a 401k. | | | | only major banks government institutions were |
| | | | able to trade on the Forex. But recently the |
| Many people hold the belief that a mutual | | | | Forex market was opened up to retail traders |
| fund is the only safe way for an individual | | | | who are able to trade through retail brokers. |
| to invest beyond the typical savings accounts | | | | |
| and CDs offered by their local bank. This | | | | The advantages of trading the Forex are |
| belief is no doubt due to the success enjoyed | | | | numerous when compared to all the other |
| by mutual funds throughout the 1990s, when | | | | investment methods. The most obvious |
| all of the stock market benefited from the | | | | advantage is that, unlike stocks, you dont |
| huge bull market that was driven by the tech | | | | have to search through thousands of different |
| sector. Ironically, though, just as mutual | | | | investment types to find a likely candidate. |
| funds have soared in popularity, they have | | | | There are a very limited number of currencies |
| also peaked in performance, and over the last | | | | that are traded, and most Forex traders only |
| few years most have seen an astonishing lack | | | | trade in one of the four major currencies: |
| of overall success. | | | | The British Pound, the Euro, the US Dollar, |
| | | | and the Japanese Yen. Each market gives |
| So the intrepid investor goes off in search | | | | enough volatility to offer plenty of trade |
| of the perfect mutual fund, only to find that | | | | opportunities each day. So while the stock |
| there is a bewildering array of funds to | | | | trader is busy looking for which stock to |
| choose from, and an overwhelming number of | | | | trade, the Forex trader is already busy |
| factors to consider when making that | | | | analyzing the market and setting up his |
| decision. Some people will forge ahead and | | | | trades. |
| make a decision on a mutual fund, while | | | | |
| others will decide to go to the next level | | | | Another advantage of the Forex is that there |
| and start looking for investments that give | | | | is no one single common place or exchange |
| them more control, and hopefully greater | | | | where the trades are made. The Forex is an |
| returns. | | | | electronic market that is traded globally |
| | | | among a network of computers, and is not |
| The next level for most investors is usually | | | | centralized to any one location. This means |
| the stock market, where they hope to achieve | | | | that there are no floor traders to compete |
| phenomenal returns. But most people are not | | | | with, and no one who can flush out the retail |
| prepared for the reality of investing in | | | | trader by gunning for his stops. |
| stocks, which presents them with an array of | | | | |
| choices that is several orders of magnitude | | | | Yet another advantage of the Forex market is |
| greater than that offered by mutual funds. | | | | that it is traded 24 hours a day, 5 days a |
| The natural question is: Which is a good | | | | week. This offers the extraordinary |
| stock to invest in? How do you select the | | | | opportunity for traders all over the world to |
| one or two rising stars out of all the | | | | trade when it is convenient for them, and not |
| thousands of stocks there are to choose from? | | | | be confined to trading a market that is only |
| | | | open during hours that would impossible or |
| So just like in the search for a mutual fund, | | | | inconvenient. |
| the investor is stuck with the problem of how | | | | |
| to pick which investment is the best place | | | | One thing the Forex offers is identical to |
| for his funds. At this point many people | | | | what is offered by the futures markets: |
| give up, which is a shame, because there are | | | | leverage. Like commodities traders, the |
| some other options available to them besides | | | | individual trading the Forex market can make |
| mutual funds and stocks. | | | | fantastic returns compared to stocks, mutual |
| | | | funds. But unlike commodities traders the |
| The most common option considered besides | | | | Forex market trades with much lower |
| stocks would be commodities. The lure of | | | | commissions. Instead of standard |
| commodities is that they are able provide | | | | commissions, the Forex trader pays a small |
| tremendous returns for your investment | | | | spread on each trade. |
| dollars due to leveraging. Leveraging simply | | | | |
| means that for every dollar invested you are | | | | There are a lot of details about the Forex |
| able to control more than a dollars worth of | | | | market, and trading the Forex market, that |
| commodity. This can lead to tremendous | | | | have been left out of this article. This is |
| returns, but unfortunately commodities come | | | | just a very quick introduction to some of the |
| with a huge downside. One of the | | | | problems with traditional investing and to |
| disadvantages of commodities are brokers | | | | the advantages to be had by trading the |
| fees, which can be quite high per trade. | | | | Forex. |
| Another disadvantage is market | | | | |
| liquiditysometimes the markets being traded | | | | Be sure to check out our free ebook for more |
| dont offer enough buyers and sellers to | | | | info on getting started with the Forex. |
| ensure that your order can be executed in a | | | | |
| timely manner. This can lead to unexpected | | | | Til next timeSuccess to you! |
| losses during times of extreme market | | | | |
| volatility. | | | | -Ted |
| | | | |
| Another disadvantage endured by commodities | | | | Ted is part of a group of Forex tradersthat |
| traders is the advantage enjoyed by the floor | | | | makes its home at: |
| traders in the exchanges. These traders have | | | | |
| a huge advantage over the retail trader | | | | Check it out for the latest ideas on how |
| because they trade with much lower | | | | YOUcan trade the Forex for profit! |
| commissions, and also since they have such an | | | | |