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Currencies: All "Traders" Are Created Equal
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The easy access, liquidity and transparency of information for traders all over the world made FOREX the largest and least regulated market providing the greatest liquidity to investors. Daily volume in the currency markets is around $1.5 trillion. By comparison, the NYSE daily volume averages $25 billion a day.
The Forex market is the most liquid market in the world. Most speculators focus on trading the highly liquid Majors where approximately 85% of trading volume occurs. Other currency pairs are less liquid and therefore increases liquidity risk.
Since the market is almost always open, traders can react to market, economic and political news as it happens, locking in profits, protecting profits and cutting losses.
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Trading on margin means that a trader can utilize more capital than they have in their account. The volatility of currency pairs is usually less than other markets, such as futures and equities. Since there is less movement, traders leverage their capital to make money on smaller moves. The amount of margin available in Forex is as high as 1% .
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