Tuesday, October 13, 2009

Difference between forex margin trading and foreign currency deposit

The forex rates keep moving although 24 hours long, but the most forex authorized banks usually set the fixing rates only once a day. Foreign currency deposit is unsuitable to the short term trading although some banks seem to decide the fixing rates every hour. The forex margin trading just costs about 10 points or 20 points as per side for US dollar, which is quite contrary that the foreign currency deposit does above 200 points on the round trip basis. As a result, the forex margin trading makes you enable to trade forex about 80 percent cheaper than the foreign currency deposit if you have intention to get revaluation gains from it. This fact means that the forex margin trading is regarded as quite day trade oriented even if the market movement is less than expected.

The bank myth that the bigger bank never be collapsed does not go through nowadays, as many banks hold enormously huge amount of bad loans. Assuming the case of bankruptcy, you could lose several money in the forex margin trading, while you would lose all the money in the foreign currency deposit.

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