Liquidity Attractive Feature of Forex
A June 2nd story by the global news agency Reuters tells the story of investor Cenk Utkan who lost half his investment in emerging market hedge funds. The 33-year-old managing director of London-based Connexion Capital introduces institutional investors to hedge funds. After losing much of his investments Mr. Utkan turned to global currency markets citing their liquidity. Mr. Utkan stated, "In Russia, stocks got suspended. So I thought instead of locking my money up in a hedge fund, why don't I go to the most liquid end of the market, which is the currency market?"
Investments Hammered By Recession
Mr. Utkan now traces currencies daily for his personal account. Mr. Utkan is not alone. Many small investors are dumping stocks, real estate, and other investments that have been hammered by the worst recession since World War Two. For these new forex investors liquidity is king. The currency exchange market is the world's largest with over $3.2 trillion dollars traded daily. Currency exchange rates are always changing and forex markets are not subject to the same sort of regulations that govern stock and equity markets. Betsy Waters of Germany's Deutsche Bank stated, "Retail investors around the world, particularly in countries where you have more controls over the equity markets, are definitely turning to FX."
Number of Forex Traders Increases
At dbFX.com, the retail currency trading platform of Germany's Deutsche Bank, volume has increased 37% in the first quarter compared with a year earlier. Other retail forex companies report a 30% monthly increase in new accounts for the last six months. Betting on currency pairs is not for the faint of heart but by using the leverage available to retail forex investors the rewards can be astounding compared to what equity markets offer. Potential investors are cautioned that leverage can be a double edged sword.
Forex Rewards Great
Although forex markets can be volatile with currency exchange rates changing several times a day those willing to educate themselves about this dynamic market and exercise discipline can reap fantastic rewards. There are many free real time currency converters available online including the popular XE currency converter and the Yahoo currency converter. Both are popular among forex day traders.