Why Trade Currencies?

Why Trade Currencies?

  • Ever since currencies ceased being linked to gold in 1972, market forces have determined exchange rates.
  • As currency trading became speculative, the volume of foreign exchange trading (FOREX) has grown dramatically
  • FOREX is now the largest financial market in the world, with over $4 trillion worth of transactions occurring every day
  • FOREX trades 24 hours a day 5 days a week, in financial centers across the world
  • Improved trading mechanisms have made trading currencies more accessible than ever
  • Improved trading mechanisms and incredible liquidity have made entering and exiting currency positions incredibly easy
  • There are no commissions (exchange, brokerage, or clearing fees) when trading in the foreign exchange market
  • There are very few major currencies, so it’s not too difficult to understand the entire market
  • Currencies have a tendency to overshoot, which leads to many opportunities
  • Currencies tend to move in predictable long-term cyclical patterns
  • Currencies are highly influenced by irrational investors, creating opportunities for algorithmic investors

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