The word FOREX stands for Foreign Exchange and it is the largest financial market of the world. By the end of year 2006, nearly $2 trillion was being traded back and forth everyday all around the world. Governments, banks, international corporations, hedge funds and individual investors take part in market daily.
There are many advantages of a FOREX market.
The market size of forex is humongous. What does it mean for an individual investor? The answer is simple, with the market being so huge, there are many traders out there. There are a lot of people ready to buy your currency, or are willing to sell theirs to you.
The market cannot be manipulated, and hence individual investors get fair bargain.
With the advent of online of Internet forex trading, it is easier to trade than ever. Anyone can start trading in FOREX with as low as 1 dollar. It does not have to be a full time job. It is open to Students, Businessmen, Corporate Slaves, Entrepreneurs, Housewives and everyone under the sun. (Even a caveman….)
The profit potential is promising. If the US dollars is going down, you can make money by selling it, If the US dollar value is going up, you can make money by buying it.
Let’s face it, Tax is poo. The tax advantage of FOREX market over stock market is noticeable.
If you make $100 profit in stock market you pay 33% in taxes
(Assuming you know math.)
$100 * 0.33 = $33 in taxes
If you make $100 profit in FOREX,
Portion taxed as short term capital gain: $100 * 0.4 = $ 40
Tax you pay on it: $ 40 * 0.33 (darn it! I had to use calculator here) = $13.2
Portion taxed as long term investment gain: $100*0.6 = $60
Tax you pay on it: $60* 0.15 = $9
Total Tax you pay is $13.2 + $ 9 = $22.2 (now compare it to $33)
For all the night owls out there, FOREX market is open 24 hours a day for more than 5 days a week.
And lastly, you pay no commission.
With the advent of internet, this market is even easier, as already mentioned above.
Start trading with as low as $1, without putting too much time on it..
How? Here’s how
- Open an account for FOREX trading …where? Google it (duh!)
- Check the tendency of foreign currencies
- Buy 4 to 5 different currencies
- go on with your day
- At the end of the day, if you had sound market observation skills, you will have gotten the money you spent on lunch today.
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