JAN 2: The Appeal of Forex Trading Versus the Stock Market
Forex trading is appealing to many more people than the stock market does and for many reasons. Among the reason is the chance of a much greater return. Foreign currency fluctuations of just one or two percent, occurring on a daily basis, have a chance of returning great rewards to an investor who catches a wave of change and properly plans his entrance and exist strategy. Many people also like the fact that more leverage is available with foreign currency exchange. For example, 10,000 dollars can be leveraged to purchase as much as 100,000 dollars through margins. This allows the chance of great returns, even at only one percent, with less risk than might otherwise be necessary.

Unlike a stock, which represents equity in a company and can be held for a long time, if not indefinitely, commodities contracts have finite lives. The word “contract” is used because a commodities contract requires delivery of the commodity in a stated month in the future unless the contract is liquidated before it expires.