The Advantages of Trading Forex
Dave Green • 3 min read
There are many ways of making money in this world, from property marketing to software development to running your own business and much more. Unfortunately, many people who make a lot of money don’t really have the time to enjoy it. Fortunately though, it isn’t necessary to sacrifice your life-style in order to earn some extra money.
In order to earn money you need to exchange a product or service. There is no magical formula to create money, it is always an exchange. However, it is possible to have continuous access to thousands of customers that always willing and able to buy from you. It avoids most of the hassles traditionally involved in running a business and can be done from anywhere any time.
Welcome to Forex trading, foreign currency exchange can be done anywhere any time with just the aid of a laptop and internet connection. Best of all, in order to trade currencies, no experience is needed, after a bit or reading and a short training course you’ll be ready to start right away.
There are many more reasons to pursue Forex trading:
1. It never closes; Forex is exchanged around the world nearly continuously. Trading begins on Monday 7am New Zealand time and ends 5pm New York time on Friday. During that time it is possible to dip in and out of the market as much as you wish. This means you can trade Forex whenever you have a bit of spare time.
2. Leverage. Standard $100 000 currency lots can be traded with as little as $1000. This is chiefly because of how easy it is to buy and sell, some brokers will leverage up to 200 times so with just $100 you can control a 200,000 unit currency position. A proper leverage is why it is an excellent idea to trade currencies; even banks which lend on property investments don’t approach this level.
3. Accuracy. Normally currency prices repeat themselves in predictable cycles so it is fairly easy to spot trends. Learning how to carry out ‘Technical Analysis’ will teach you how to spot the trends and then profit from them. This means when you trade forex it is almost possible to guarantee a profit.
4. Low Transaction Costs. This means that if you make a mistake or two (as beginners are bound to do) it won’t leave you bankrupt. A good broker won’t charge you commissions to trade currencies or maintain an account, even if you’re only trading small volumes with a mini-account.
5. Unlimited Potential Profits. Forex has a daily trading volume of over 1.5 trillion making it the largest financial market in the world. The equities market is only 50 billion per day and the futures market 30 billion so there really is loads of money to be made.
6. Make money regardless of Market Conditions. A market is one currency against another, therefore when you buy one you’re selling in another. This means there is no bias towards either currency moving up or down. You can choose which currency to buy or sell with which means you can make money going up or down.
7. Market transparency. This is always an advantage in any business. It allows you to manage risk and execute orders in a matter of seconds. It’s extremely efficient and means you can avoid the unexpected.
It is now clear why those who trade Forex have such a good chance of making profits and after some careful studying and a bit of practise there’s no reason why you shouldn’t join them in no time at all.