Forex Trading

Forex Trading

First of all, let’s explain what Forex trading is. In simple words it’s the act of acquiring and selling currencies. Forex is the largest financial market of the world. Its turnover is more than $5 trillion per day. We will explain the basics of trading and give some information on pros and cons of the platform.

How Forex works

Exchange rates fluctuate constantly, and traders make money out of it. In order to explain how this happens, let us show you a brief example. Imagine you go abroad and buy dollars for €1000. You don’t spend a single dollar and return home. When you exchange your money back to euros, you find out that the amount of it is now €1010. So you have made a 10 euros profit. This is how trading currencies works.

So, all you have to do is just buy an asset, hold onto it until it is expensive enough and then sell it. Chances of potential gain are bigger with highly volatile markets, but only if you do everything properly. Hundreds of thousands of people believe they can do it, that’s why trading has now become so popular.

Obviously, you don’t have to go out of your house to trade. What’s more, you don’t have to acquire currencies. Nowadays everybody can invest in exchange rate changes even from smartphones, so the process has become much more convenient.

Why People Trade Forex

According to the statistics, over 90% people give up in the early stages of getting to know the platform. Here are several reasons not to do so:

∎ Independence. While performing all the financial operations, you depend only on yourself. You don’t have to do what boss your boss wants you to do. You don’t have to rely on your co-workers in order to make a profit. If you do great, then you will earn great, too.

∎ Unlimited opportunities. If you have found a win-win strategy, you have no limits on the income. Nobody will block your account just because you are good at trading, as it’s profitable for both trader and the platform.

∎ Ease of access. You can trade wherever you want as long you have a stable internet connection. As we said before, even a smartphone is enough to fulfill all the goals that you have set for yourself.

∎ Challenge factor. Forex is neither like a casino nor one of bookmakers. You cannot be successful here just because you are lucky enough, so hard work is awarded here. Many of other traders want to become better than you, and that’s why Forex is for people that are ready to improve their knowledge constantly.

Surely, trading is not easy to understand. Currency prices are affected by many factors, such as inflation, monetary policy, employment index, economic growth rates and so on. Moreover, there are dimensions which are almost impossible to predict. People thinking that Forex is always about making a profit delude themselves, as risks are high. Fortunately, experience is the best teacher and a good trader can draw lessons even from fails. Later on, he won’t make the same mistake again.

Trading is learning new things constantly and it resembles Online Poker in this aspect. There are lots of books, courses and videos on the subject. Some of them are chargeable and you have to make your own decision whether you want to pay for knowledge or not. Free demo accounts can also be quite useful. They are used for training new strategies and getting to know the basics. After you find yourself quite successful, the real Forex is waiting for you with all the risks and rewards.

To sum up, Forex trading is definitely not for everyone. It cannot be called a source of easy money, but with proper attitude your opportunities are almost limitless. So, if you are ready for hard work and studying constantly, then it’s time to trade!