Simply said, no other trading instrument comes even closely to forex market when it comes to liquidity, 24hr market environment and last but not the least, profit potential. Forex (currency) market is the largest (most liquid) financial market in the world, with an average daily volume of more than US$ 1.5 trillion, which is more than all of the global equity markets combined.

Forex trading day starts in Wellington, New Zealand followed by Sydney, Australia, Hong Kong and Singapore. Three hours later trading day begins in Dubai (UAE) and other Middle Eastern countries. In couple of hours they are followed by Frankfurt, Zurich, Paris, Rome… London is the last one to open in Europe and five hours later it is followed by New York, Chicago and finally the West Coast. The busiest hours
are early European mornings because at that time major Asian exchanges are still open and European afternoons because at that time major US markets are open at the same time as Europe. Therefore, wherever you live and whatever your work hours are you can always find some time to participate in forex trading as opposed to stock market where you are usually limited to the regular business hours.

And when it comes to profit potential lets have a look at figures below:

Figure 1.1. is a daily candlestick chart for America Online (AOL) covering a period from June to September 2003. Figure 1.2. is a daily candlestick chart for S&P 500
e-mini contract (ES) covering a period from June to September 2003. Figure 1.3. is a
daily candlestick chart for EUR/USD covering the same period. We will now illustrate
the difference in profit potential among those three popular trading instruments. Let’s assume that in all three cases our start up capital is $5,000. We will choose the best five trades that we could have placed in each trading instrument (those trades are described with T1 ..T5 arrows on each chart) during the above mentioned four month period.

As we have mentioned above we will assume a $5,000 start up capital and usual 2:1
equity trading margin.

$5,000 at 2:1 margin means with $5000 we can buy $10000 worth of stocks
T1 (trade 1) we can buy 650 shares of AOL at $15
15 – 16 = $1 per share * 650 shares = $650 profit
Now we have $5650 and we can buy 11300 worth of stocks
T2 (trade 2) we can buy 740 shares at $15.25
15.25-16.75 = 1.5 = $1110 profit
Now we have $6760 and we can buy $13,520 worth of stocks.
T3 (trade 3) we can short sell 800 shares at $16.75
16.75-15 = 1.75 * 800 = $1400 profit
Now we have $8160 and we can buy $16320 worth of stocks.
T4 (trade 4) we can buy 1000 shares at $15 per share
15 – 16.5 = 1.5 * 1000 = $1500 profit
Now we have $9660 and we can buy $19320 worth of stocks
T5 (trade 5) we can short sell 1200 shares at 16.75
16.75-16 = 0.75*1200 = $900

Total $10,560
Profit $5, 560 or 111%

Again, we will assume $5,000 start up capital and current S&P 500 e-mini trading
margin.

ES
$5,000 buys one contract at $3,600 margin
1 point = $0.5
T1 (trade 1) 95000 – 100500= 5500 * 0.5 = $2,750
$7,750 buys two contracts
T2 (trade 2) 100500- 97500 =3000*2*0.5 = $3,000
$10,750 buys two contracts
T3 (trade 3) 97500-100500 = 3000*2*0.5 = $3,000
$13750 buys three contracts
T4 (trade 4) 99000 –97000 = 2000*3*0.5 = $3,000
$16,750 buys four contracts

T5 (trade 5) 97000 – 102000 = 5000*4*0.5 $10,000

Total $26,750
Profit $21,750 or 435%

We will again assume $5,000 start up capital and we will start with 1:20 margin, however we will slowly reduce our margin in order to minimize our risk exposure.

EUR/USD
$5,000 controlling $100,000 margin 1:20
T1 (trade 1) 1.185 – 1.110 = 7.5 cents profit = $7,500 profit
$12,500 controlling $200,000 margin 1:16
T2 (trade 2) 1.115 – 1.15 = 3.5 cents profit = $7,000 profit
$19,500 controlling $300,000 margin 1:15
T3 (trade 3) 1.15 – 1.125 = 2.5 cents profit = $7,500
$27,000 controlling $400,000 margin 1:15
T4 (trade 4) 1.13 – 1.09 = 4 cents profit = $16,000
$43,000 controlling $600,000 margin 1:14
T5 (trade 5) 1.08 – 1.13 = 5 cents = $30,000

Total $73,000
Profit $68,000 or 1,360%

From the examples above we can observe that currency trading offers at least 10 times
more profit potential than a volatile tech stocks and at least double profit potential than S&P 500 e-mini contract when starting with the same start up capital. We should also note that we did not cheat when choosing the above examples, no matter which multi day/month period you choose, currency trading will provide you with more opportunities, longer lasting trends and much better profit potential than any other trading instrument.

There are other differences between trading stocks and currencies. Even the strongest companies can lose 90% of their value, look at Nortel falling from $100 to $2 in two years… How about Lucent? On the other hand can you imagine good old US buck collapsing in such a way, or Euro, or British pound?
If you are a Canadian you know that Canadian dollar moves from about 64c to 78c US, it has been like that for years. Can you imagine Canadian dollar becoming equal to US dollar. I bet you can’t. Canadian economy would collapse in such situation, they couldn’t export anything to US, Canadian government wouldn’t allow it. Or if you are European, can you imagine 1 Euro being worth 2 US dollars. That would mean former deutsche mark being worth 1 US dollar. I don’t think so.

There are also some limits to how low and how high currencies can go. These are
not just psychological limits, those limits are there for purely economic reasons. How much would an average BMW cost in the United States if one Euro was worth two US
dollars? 100K perhaps? Who would buy it at such price? On the other hand Levi’s could sell their jeans in Europe for 25 Euros and still make profit. How would European companies compete with that. You would see much less “Americans in Paris” at 2 US dollars per Euro. There goes French tourism. You see my point.

However, keep in mind that we are talking only about G7 currencies here: US dollar,
Euro, British Pound, Japanese Yen and Canadian dollar, and one that is not in G7 but is the safest of them all - Swiss Franc.
These rules do not apply to Argentinean Pesos, Russian Ruble, Turkish Drachma…
Unfortunately, anything can and usually does happen to those currencies. Therefore we will stick with major currencies only.Also, when trading currencies there is no bear market. In stocks major money is made only in bull markets, in bear markets traders are just trying to keep their heads above the water. Mesothelioma Treatment, Mobile Phone gadgets

Many new traders get confused about different kinds of currency markets - spot
market, forward market, currency pairs, futures market, currency options… Well, it is all nice and well for some finance student or professor to know the theory behind these markets, however Actually it is all very simple. All those currency trading instruments boil down to the same thing – you need to predict whether the currency of your choice is going up or down compared to some other currency. Most of our examples will be from the spot market, however that doesn’t stop you to implement our strategies to currency futures or to any other currency market. The only decision that you will have to make is how much risk (measured with leverage) are you willing to take.