Forex Trading - Why trade Forex?

Forex Trading - Flexibility: profit in a falling as well as a rising markets with no expiry period
You can trade long or short of any FOREX currency pair, enabling you to take a positive or negative view and unlike forms of equity trading and spreadbetting FOREX contracts have no settlement period and you can keep the position open indefinitely, providing there is enough margin in your account to support the position.

Leverage: control larger positions using margin rates as low as 1%.
When you open and FOREX trade you do not have to put up the full underlying contract value. Instead you put up a deposit (margin) as initial collateral. The sheer volume going through the FOREX market in the major currency pairs means that FOREX Trading has some of the lowest margin rates available, usually between 1% - 5%. This has the potential to significantly magnify profits but can also magnify losses. Blue Index recommend the use of stop losses with each FX trade.

Cost effectiveness: very low transaction costs
Because of the liquidity of the FOREX market, the transaction cost (the bid/offer spreads) are typically much less than those of the less liquid markets and instruments, e.g. individual shares and commodities. At Blue Index we are committed to offering the tightest bid/offer spreads at inter-bank levels and competitive commission rates.

Risk management: hedge existing holdings
In anticipation of a fall in a currency value, a short position can remove or reduce risk on long-term currency exposure; for example overseas property.  Blue Index can advise you on the best transaction to conduct to mitigate this exposure.

24-hour market: trade round the clock
A FOREX trader may take advantage of profitable market conditions at any time. There is no waiting for the opening bell.

Global market exposure: inter-bank market
The backbone of the FOREX market consists of a global network of dealers. They are mainly major commercial banks that communicate and trade with one another and with their clients through electronic networks and telephones. There are no organised exchanges to serve as a central location to facilitate transactions the way the LSE serves the equity markets. The FOREX market operates in a manner similar to the way the NASDAQ market in the United States operates; thus it is also referred to as an over the counter (OTC) market.

Independent of other markets: limited links to the stock market
A trade in the FOREX market involves selling or buying one currency against another. There is limited correlation between the foreign currency market and the stock market. A bull market or a bear market for a currency is defined in terms of the outlook for its relative value against other currencies. If the outlook is positive, we have a bull market in which a trader profits by buying that currency against other currencies. Conversely, if the outlook is pessimistic, we have a bear market for that currency and traders may profit by selling the currency against other currencies. In either case, there is always a good trading opportunity for a trader.

Objective marketplace: trade with confidence
The FOREX market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. As the market has grown even central bank interventions have become increasingly ineffectual and short lived as a tool for controlling the value of a particular currency.

Anonymity: trade discreetly
FX trades do not result in transfer of ownership, so the usual stock exchange disclosure rules do not apply, and the trades are not published.

Please call us on 020 7398 2555 for more details about Forex trading and opening up an online trading account with Blue Index.