In this article I will cover two important advantages that the Forex market offers to traders.
Daytrading with a small account
If you want to daytrade with stocks and you have less than $25.000 on the account, you are likely to have a hard life. The reason is that a rule called “pattern day traders” allows you to daytrade freely only if you have that amount or more on your account. If you have less, your daytrades (positions entered and exited the same day) are limited to three in any five trading days period. Your broker should monitor your activity and make sure you do not execute trades that are not allowed under the “pattern day traders” rule. This regulation applies for stocks and stock options. The Forex market at the time of this writing is not involved.
Risk Control
The Forex market has two characteristics that may translate in a better risk control on your trades. What I mean by risk control, is the possibility to define your maximum loss should the market move agains you. If we do not consider the use of options or other tools as a hedge, the way to take control of losses is by using a stop loss order.
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