The profit potential is why participants enter the market. But why
would a speculator choose to trade forex instead of equities or futures?
Forex offers several advantages over speculative trading in futures, stocks and other equities. Eight major currency pairs dominate most currency trading, so it is a much simpler market to follow for most traders. The vast majority of trades involve the United States Dollar, while the Euro, British Pound and Japanese Yen are also widely traded.
Forex offers several advantages over speculative trading in futures, stocks and other equities. Eight major currency pairs dominate most currency trading, so it is a much simpler market to follow for most traders. The vast majority of trades involve the United States Dollar, while the Euro, British Pound and Japanese Yen are also widely traded.
Although most currency speculation occurs between a relatively small
number of currencies, many brokerages offer trading in a much wider
range of less commonly-traded currencies.
Some prospective traders looking to participate in speculation are
attracted by the low account balances required to open a forex account
with some brokerages.