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How to Navigate the Fast-Paced Forex Market

A Conversation with Lubomir Kaneti, Chief Operating Officer at Forex broker, FXDD

As the largest and one of the fastest-growing asset classes worldwide, retail Forex is gaining the attention of traders internationally. With more than two decades in the industry, FXDD’s Lubomir Kaneti is passionate about the $4 trillion foreign exchange marketplace. lubomir kanet

As the chief operating officer at FXDD, Kaneti has first-hand insight into the rapidly growing asset class, and sees innovations in technology and education as being the main drivers of success for retail currency traders. In managing operations and strategic growth for the burgeoning Forex firm, he believes FXDD’s forward-looking and unique approach to customer service and trading technology helps its clients traverse the fast-paced global currency market.

Mr. Kaneti offers his tips for successfully navigating the evolving retail Forex market.

What advice do you have for someone who is entering the Forex market?

Knowledge is power! Success in currency trading, as in any endeavour, is based on building the right foundation and using the proper tools to guide you toward your goal as a trader. The tools that every successful trader employs, regardless of asset class, are: knowledge, practice and a smart plan of action. Forex trading is no exception to this rule.

There are many variables to consider and numerous things to learn and perfect before trading with your own capital. Because of this, FXDD offers free demo accounts and tools that help traders best position themselves for success, including daily market commentary, educational courses and free webinars. In addition to these tools, FXDD sponsors ForexLive.com – a free news and analysis site – where traders can stay current on the latest economic events, ask questions and interact with other like-minded traders.

What are some of the tenets of foreign exchange that make it so unique compared to other asset classes?

Similar to other financial instruments, Forex presents traders and investors with a market where they can buy or sell an investment product. In the case of Forex, the product is a specific currency pair. This may be the U.S. dollar versus the Japanese yen, the euro versus the U.S. dollar, the British pound versus the U.S. dollar, or a number of other currency combinations.

There are many attributes that make the foreign exchange market attractive to traders around the world. These include, but are not limited to:

  • Deeper Liquidity
    With a daily trading volume that is 50 times larger than the New York Stock Exchange, there are always brokers/dealers willing to buy or sell currencies in the Forex markets. The liquidity of this market, especially that of the major currencies, helps ensure price stability. Traders can almost always open or close a position at a fair market price. Because of the lower trade volume, investors in the stock market are more vulnerable to liquidity risk, which results in a wider dealing spread or larger price movements in response to any relatively large transaction.
  • Leverage
    50:1 leverage, which substantially exceeds the common 2:1 margin offered by equity brokers, is commonly available though online Forex dealers. At 50:1, traders post a $2,000 margin for a $100,000 position, or 2%.
    This leverage can work against you, as well as for you, so it’s very important to set up your risk parameters before executing trades with real capital.
  • Lower Transaction Costs
    It is much more cost efficient to trade Forex. Most Forex brokers offer traders access to all relevant market information and trading tools as part of their free services. In contrast, commissions for stock trades range from $7.95–$29.95 per trade with online discount brokers and up to $100 or more per trade with full-service brokers. Another important point to consider is the width of the bid/ask spread. Regardless of deal size, Forex dealing spreads are normally 5 pips or less (a pip is .0005 US cents). In general, the width of the spread in a forex transaction is less than 1/10 that of a stock transaction, which could include a .125 (1/8) wide spread.
  • 24-hour Trading
    Forex is a true 24-hour market. Whether it’s 6 pm or 6 am, somewhere in the world there are always buyers and sellers actively trading foreign currencies. Traders can always respond to breaking news immediately.

Foreign exchange is one of the fastest growing markets for retail traders. In your opinion, where do you think the industry is headed next?

FXDD has clients around the globe, and we can say with certainty that growth in the Forex market isn’t slowing anytime soon.

There are many catalysts for this type of exponential growth, but I believe one of the main reasons is the access to information available to the retail trader that wasn’t there, 10 or even five years ago. Today, many more retail traders are getting involved in Forex because they now have the information to plan and make smart, informed trades more rapidly. This trend is sure to continue because Forex is a market that can be traded efficiently in any economic climate.  There is equal upside opportunity in an economic boom as there is during a recession.

FXDD received “Most Trusted Forex Broker Europe 2012” and “Best New Platform 2012” from Global Banking & Finance Review. Why do you think clients choose FXDD?

At FXDD, we provide our clients with the level of service and personal attention they deserve.
We do this in many ways – though our respectful and helpful customer service, as well as the tools and analysis we provide – including free Forex education, stable and easy to use platforms and excellent daily commentary. This – in addition to consistently tight spreads, quick deposits, smooth withdrawals, easy to follow daily trade activity, and a very simple order system – is what makes us unique.

We also continue to invest heavily in producing great educational content and developing state-of-the-art trading platforms. These assets help our clients develop successful trading strategies and enable them to execute those strategies quickly and effectively. We have found that this holistic approach to the customer experience improves performance and helps traders navigate the markets in the smartest, fastest, way possible.

Disclaimer: Forex is risky and not suitable for all investors. Only trade with discretionary funds. Past performance is not indicative of future results.