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