There are advantages when trading on the forex market and my aim for writing this article is to revise them for you. One myth I want to discard before indulging in the matter. The myth says that there exists a difference between trading and investing. A quote from Al Thomas, the President of Williamsburg Investment Company will help dispel it. He said “If It Doesn’t Go Up, Don’t Buy It” and he also added “Everyone who invests is a trader, only the time period is different”. After I lost much on the stock market in 2000 I took that lesson seriously.

Let us now compare the features of the currency trading with those from stock and commodity trading.

Liquidity - Around 1.9 trillion dollars are traded everyday on the most liquid financial market in the world – Forex. In comparison the commodities market trades around 440 billion dollars a day and the US stock market trades around 200 billion dollars a day. A better trade execution is ensured this way that prevents the manipulation of the market and it also ensures that the trading can flow easily.

Trading Times - except on the weekends the Forex market is open 24 hours a day. It allows the traders to choose the time they want to trade as the market opens at 3:00 pm Sunday (EST) and closes Friday at 5:00 (EST). All over the boards are available the trading hours of the commodities. They depend on the commodity you’re currently trading. Extended trading times allow for US stocks to be traded from 8:30 am to 6:30 pm (ET) on weekdays.

Leverage - your leverage may be 100:1 but you can find brokers that offer a leverage of up to 400:1(not recommended) and it depends on your Forex account size. In the stock market it can reach 4:1 while on the commodities market it varies depending on the commodity traded and can be very high. Commodity markets are with riskier leverage because the liquidity is much lower than that of the Forex market. Because of the day limit on commodity trade the fear always stayed in the back of my mind though I was never shut out.

The costs of trade - The difference between the buy and sell price of each currency pair dictates the transaction costs in the Forex market. Brokerage fees do not exist. However in the stock and the commodity markets you’ll be charged both transaction and brokerage fees. These fees exist even if you use discount brokers.

Minimum investment - A Forex trading account is possible to be opened for as little as $300. $5000 was the amount I had to acquire in order to open a futures trading account.

Focus - 7 major currencies amount for 85% of all the trade transactions. There can be found 40000 stocks on the US stock market alone. Already there are over 200 commodity markets that are so illiquid that only hedgers trade on them. As the number of instruments is few it allows us to study them in detail.

Trade execution – it happens almost on the moment when trading on the Forex market. You will be counting on broker should you wish to trade on equity or commodity markets. Your trades must be executed by him with sometimes inconsistent results.

While all of the above outlines the Forex market as very attractive it will still require you to possess commitment and patience an