Before going into any kind of venture… it is always wise to understand why you want to do it.
So why trade Forex?
- Forex is the largest market in the world in volumes. As said before, it trades more than $3 trillion a day, which translates to dense liquidity. The more the dense liquidity, the easier it becomes to get in and out of positions.
- There is no opening bell, so you can trade any time you want between 5pm EST Sunday to 4pm EST Friday every week.
- The Forex market is easily accessible. Many retail brokers sell a trading account at only $250 which is can be used within the same day of purchase.
- Do not get lost in a maze of stocks;the currency market is easy to trade as there are fewer currency pairs unlike the stock exchange.
- You can trade anywhere in the world, all you need is a laptop and Internet connectivity.
- Many retail marketers offer commission- free trading and the transactions are lower compared to trading stocks or commodities.
- Volatility of the market conditions offers high-profitability opportunities every week.
- In Forex trading, all traders are equal and have equal chances in rising or falling markets, unlike the stock markets where an existing structural market favors the select few.
Forex market is a great market to trade with real chances of making huge profits.
However, as much as there are profits, the risks are equal in the same magnitude.
Do not fall into the trap of thinking of only about the rewards, think about the risks too.
Most new traders will always ask how much money can I make in trading.
The experienced traders instead ask… how much money will I lose.
It’s always defense first instead of offense.
A strong defense will keep in the game and in this business for a long time.
Know that you could lose in any given trade you take and remember the one rule of trading discussed earlier – only trade what you are ok losing.