The Advantages of Trading Forex?

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  1. Alexander Roan says

    Hi Alwin, a few questions / points”
    1) You mentioned levarage a couple of times in this unit, but without really explaining what leverage is?
    2) Are there any risks that the forex market will become regulated and if I learn how to trade now I may not be able to do so in the future
    3) Can the methods I learn for forex be used in other markets in case forex becomes more regulated in future
    4) You said transaction costs are low, and also explained they are in the spread, is this the only cost I should consider for forex trading?

    • Alex,

      Another set of good questions

      1) The term leverage means using borrowed money or debt to finance an investment. The most common example is a mortgage or a home loan.

      In the context of trading, we use leverage to profit from the fluctuation in the exchange rate between two countries. In fact, the currency market has the highest leverage compared to many financial instruments.

      For example, to trade $100,000 of currency, with a margin of 1%, traders only have to deposit $1,000 into his or her margin account. This represents a 100:1 leverage and this is significantly more than a 2:1 leverage in equities.

      The truth is, there is nothing to worry. If you were to follow my lessons and instructions by having a proper Risk Management, this should not be of any concern.

      2) Yes, just like trading, there is a risk that the forex market can become regulated. However, the chances of that happening in the near future are fairly slim (but not impossible).

      The truth is, regulators are constantly trying to regulate the market but the market is too big and, hence, regulators are still struggling to achieve that. This is especially true with Forex brokers and service providers who disregard these regulations and get away with dealing in way contrary to the official policies of the regulatory bodies – hence, where possible, you should only use recommended brokers.

      Here at Market Apprentice, you are predominantly learning price action and technical analysis. These methods have been used by the Dutch markets in the 17th century and the Japanese in the 18th century.

      For more information on TA, see this unit –

      3) Yes, I trade the Gold, FTSE and Dow Jones using the same market. You can also trade the stock market and other commodities using the same method.

      4) In trading the FX market, the main costs that you should be concern are Spread, Commission and Rolling cost.

      More details are included in the Smart Apprentice Module.

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