Why Trade FX?
The FX markets are open 24 hours per day during the FX business week.
Individuals looking to profit from market movements can act any time of the day or night during the FX trading week to take advantage of changing market conditions. Chicago Mercantile Exchange® (CME) offers electronic access to its entire range of FX futures, virtually 24 hours per day during the FX trading week. The extended access throughout the day was made possible with the introduction of “side-by-side” electronic trading with floor trading, occurring in CME futures pits.
Trading in the FX markets offers diversification.
In today’s equity market environment, diversification is a critical factor in individual portfolio management. FX Futures can offer valuable market risk diversification for an investment portfolio that has equity market risk.
Exchange rates march to their own beat. On a historical basis, changes in exchange rates have had very low correlations with price movements in stock market values and interest rates. This lack of any systematic relationship can be exploited to lower portfolio risk and generate positive returns when other markets are in a depressed state.
When a trader initiates a position in a currency, it is either a bullish or bearish outlook versus other currencies. If the outlook is bullish, a trader can profit by purchasing that currency against other currencies. However, if an outlook is bearish, a trader can profit by selling that currency against other currencies.
The Parker FX Index*, a benchmark which measures the returns of global currency managers, reveals healthy returns over the last three years. As of 2002, the Parker FX Index revealed gains of 3.24 percent over the last three months (as of December 2002), a 7.99 percent gain over the past 12 months, a 12.63 percent gain over the last two years and a 20.8 percent gain over the past three years. Past performance in a particular financial instrument or index is not necessarily indicative of future results. There is a substantial risk of loss in trading futures on any type of investment product.
FX markets are deep and liquid.
They offer traders the opportunity to efficiently enter the market. Since their inception, the advantages of CME FX futures over cash market products have produced an active trading environment through which customers collectively place trades worth up to U.S. $32.1 billion (CME single-day notional volume record, December 9, 2002). The success of FX futures has created a robust trading environment.
As the world’s largest exchange for trading FX futures, CME has a wide network of users who trade via affiliated futures brokerage firms. CME FX enjoys automated pricing support via electronic links to some of the world’s leading financial institutions. These institutions supply the exchange with consistent liquidity and aggressive dealing spreads. When participating in the largest financial market in the world, the ability to execute trades regardless of position magnitude is critical. CME FX offers the necessary liquidity and required pricing via transparent, publicly available FX prices.
Why We Made This Site - A message from Andy Daniels, CEO and Founder of Daniels Trading.
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