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Historically, the majority of the general public has viewed the securities markets as an investment vehicle. In the last ten
years securities have taken on a more speculative nature. This was perhaps due to the downfall of the overall stock market
as many security issues experienced extreme volatility because of the irrational exuberance displayed in the marketplace.
The implied return associated with an investment was no longer true. (If indeed it ever was.) Many traders engaged in the
day trader rush of the late 90's only to realize that, from a leverage standpoint, it took quite a bit of capital to day trade, and
the return while potentially higher than long-term investing was not exponential. After the onset of the day trader rush,
many traders moved into the futures stock index markets where they found they could leverage their capital greater and not
have their capital tied up when it could be earning interest or making money somewhere else. Like the futures markets,
spot currency trading is an excellent vehicle for pattern day traders who desire to leverage their current capital to trade.
Spot currency or forex trading provides more options, greater volatility and stronger trends than currently available in stock
futures indexes. Former securities day traders have an excellent home in spot foreign exchange (forex).
No Middlemen
Centralized exchanges provide many advantages to the trader. However, one of the problems with any centralized
exchange is the involvement of middlemen. Any party located in between the trader and the buyer or seller of the security
or instrument traded will cost them money. The cost can be either in time or in fees. Spot currency trading does away with
the middlemen and allows clients to interact directly with the market-maker responsible for the pricing on a particular
currency pair. Forex traders get quicker access and cheaper costs.
Buy/Sell programs do not control the market
How many times have you heard that "fund A" was selling "X" or buying "Z"? Rumor had it that the funds were taking profits
because of the end of the financial year or because today is "triple witching day", all as an explanation of why this stock is
up or the market in general is down or positive on the session. No matter what your broker says the stock market is very
susceptible to large fund buying and selling, and it is not uncommon for a fund to run a particular issue for a few days. In
spot currency trading, the liquidity of the forex market makes the likelihood of any one fund or bank to control a particular
currency very slim. Banks, hedge funds, FCM's, governments, retail currency conversion houses and large net-worth
individuals are just some of the participates in the spot currency markets where the liquidity is unprecedented.
Analysts and brokerage firms are less likely to influence the market.
Have you watched TV lately? Heard about a certain Telecomm stock and an analyst of a prestigious brokerage firm
accused of keeping its recommendations, such as "buy" when the stock was rapidly declining? It is the nature of these
relationships. No matter what the government does to step in and discourage this type of activity, we have not heard the
last of it. IPO's are big business for both the companies going public and the brokerage houses. Relationships are mutually
beneficial and analysts work for the brokerage houses that need the companies as clients. That catch-22 will never
disappear. Foreign exchange, as the prime market, generates billions in revenue for the world's banks and is a necessity of
the global markets. Analysts in foreign exchange don't drive the deal flow, they just analyze the forex market.
Analyzing countries is easier than companies
Countries are often more stable than companies – and it's easier to predict their overall economic direction. Currencies are
traded in pairs, so if a trader “buys” one currency, he is simultaneously “selling” the other. As with a stock investment, it is
better to invest in the currency of a country that is growing faster and is in a better economic condition. Currency prices
reflect the balance of supply and demand for currencies. Two primary factors affecting supply and demand are interest
rates and the overall strength of the economy. Economic indicators such as GDP, foreign investment, and the trade
balance reflect the general health of an economy and are therefore responsible for the underlying shifts in supply and
demand for that currency. There is a tremendous amount of data released at regular intervals, some of which is more
important than others. Data related to interest rates and international trade should be most-closely examined.
8000 stocks vs 4 major currency pairs
There are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ.
Which one will you trade? Got the software? Got the time? In spot currency trading, you have 4 major markets, 24 hours a
day 5.5 days a week.
Commission free*
Simply put: no commissions*, no clearing fees, no exchange fees, no government fees, and no brokerage fees. Sure there
may be different names for different fees at different places, but in spot currencies no commissions* means just that- NO
COMMISSIONS*.
Same price for broker assisted trades.
No premium for calling in orders, whether or not you trade forex via the phone, use market orders, stop orders, limit orders
or even contingent orders. In spot currency trading you do not have to worry about extra charges. Ever wonder why a
securities brokerage house charges you more if they have to guarantee you a price than if you give them a market order
with no price qualifier? Well you don't have to worry about it if you trade the currency markets.
Trade off of your profits
Ever been up on a stock and wished you could leverage that profit and get in a little more of the issue? In spot currency
trading you can. Use your open profits to add to your positions. As you gain experience, experiment with pyramid trading
strategies. The options are endless because the market is cutting edge
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Fenix Capital Management,LLC (“FCM”)
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RISK WARNING
THE RISK OF LOSS IN TRADING FOREX CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR
FINANCIAL CONDITION. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS IN FOREX TRADING.
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