In case you’re still in doubt, the forex trade is the biggest industry in the world. It has a humongous daily turnover of over 4 trillion dollars(Which industry does that?) . In other words there is enough money to go around for everybody. Before I make a case for why the forex trade is popular is so popular, let me sound a little warning. Forex is a high risk business. You cannot trade as if you’re playing the lottery. You’re pretty much your own CEO, and you need to treat the forex trade as a business. Failure to do so could cost you dearly on the market.
So why is the forex trade so popular?
Cheap Trading Costs
Unlike the stock exchange, cheap trading costs is part and parcel of the forex trade. You don’t need to deal with headaches such as clearing fees, exchange fees, no government fees, no brokerage fees, et.c. You only need to pay the difference between the bid and asking price(or bid and ask spread).
No Middle Men
For some of you who are worried about intermediaries pinching some of your profits from your trades, I’ve got some good news for you: “NO MIDDLE MEN!” The flexibility of the forex trade makes middle men totally useless. You can trade directly with the market without the interference of middle men.
You Determine Your Own Lot Size
Unlike future markets where lots are determined by exchanges between traders you determine your own lot size. This frees you to open accounts as small as $250.
The Forex Market Never Sleeps
Just like Las Vegas, the forex market never sleeps. As a matter of fact, the forex market never sleeps. From Sunday evening to Friday afternoon, traders are around the world can be seen hammering away at their laptops and other hand-held devices. This arrangement is perfect in that you can choose to trade full-time or part-time depending on the time of day that suits you-morning noon, or night. Since the forex trade is not a 9-5 arrangement, you can set trades at any time, be it day or night.
Long Or Short
Unlike other financial markets you can go long or short on your trade, depending on the leverage of your trade. If a currency goes up, you buy it. If the value of a currency goes down, it only makes sense that you sell it to avoid incurring a heavy loss.
The Forex market’s incredible $4 trillion liquidity coupled with trading concentrated in a few major currencies makes it easier for traders to get in and out of trades at any time with large lot sizes at the click of a mouse. You can even set your online trading platform to close your position at a set profit level or close a trade if the market starts turning against you.
The forex market’s boundless liquidity creates considerable trading leverage at ratios sometimes in the neighborhood of 200:1 This means a small $50 deposit can enable you to buy or sell $10000 worth of currencies. In the same vein a $500 deposit could turn into $100,000 trade and so on. However this considerable leverage available to traders can also be a poisoned chalice. Without proper risk management, this huge leverage could make or break your trades.
That’s a wrap for “Why Is Forex Trade So Popular?” Hopefully this post has whet your apetite to pursue a career as a forex trader. If you have any questions or something to say, drop them both in the comment box…Till next time, take care.
Looking to Join The Forex Trade Bandwagon?
If you’ve stumbled in here looking to join the forex trade bandwagon, here is what you need to do . First, you need to learn the fundamentals of forex trading by reading Forex Trading Basics – Top To Bottom Part I and Forex Trading Basics – Top to Bottom Part II .Next, you need to learn how to read candlestick patterns. They are the main feature of price action analysis And you need to know what these patterns are telling you. To be able to do that read the following on Fundamentals of Reading Candlestick Patterns, Single Candlestick Patterns, Dual Candlestick Patterns, and Triple Candlestick Patterns . Also You Need To Know Ten Of These Candlestick Patterns . And finally If you want to give your trading skills an edge by relying on pure price action trading/analysis, instead of fancy forex robots and fancy indicators, get started with What is Price Action Trading?
Looking to get a leg up on price action analysis,?You need to learn How to Identify Support and Resistance Levels. And if you want to learn how to interpret trading zones, read up on Identifying Dynamic Support and Resistance Levels. Finally you should know How To Read Candlestick Patterns using Support and Resistance Levels.
However, if you only want to trade once a month and watch your entry rack up huge profits over a stretch of several weeks, consult How to Spot High Probability Trades. And if you are still not sure about price action trading, find out Why Price Action Trading Still Rocks . Dont let me stop you from reading the other posts as well. But the suggested posts above are the most important posts to get you started.
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Opening Of Live Forex Trading Account
If you’re looking to open a live trading account account sign up with EasyMarkets.
But if you want to get a feel for the platform first and practice your trading strategies before going live, open a free demo account with EasyMarkets.