Many people have dabbled in stock investments, their parents did it, and it made sense for long-term investments. But that was then, and this is now, and now is the time to take advantage of the opportunities offered by the largest online trading activity.
Have you given a thought to trading in the Forex market? If not why not? This is a potential income option that is now accessible by everyone, as the internet has opened the door on these previously exclusive activities.
So what exactly is the Forex Market? It is also known as the Foreign Exchange Market, so that tells you this is about currencies, the money that funds all activities the world over.
What are the advantages for me? I hear you say. I left school with only a high school diploma and went straight to work. That does not matter with Forex trading, as nobody is looking at your qualifications for trading other than you. It would not be advisable to just jump straight in, but the opportunities to learn before you test the waters in this market is phenomenal.
The process of learning is continuous; you gain insight, knowledge, and experience. You can even find other traders online willing to share their strategies and tips. So, interested? Then read on and consider what the market of Forex has to offer:
Trading in Forex is not a passive activity. It demands a trading plan and a trading strategy to achieve the best possible outcome; making a profit. Forex trading is where small currency movements can result in significant profit, and of course, potential losses if you are not careful, whereas with stocks it does not have the same impact.
Leverage in Forex trading is one of the many attractions. When you consider stock leverage is usually 2:1, in Forex you can find 50:1 or higher in some parts of the world. Volatility is high, allowing for larger profit margins in the quickly changing marketplace.
The Forex market has been on a steady upward growth pattern for the past 15 years, but stocks cannot say the same. In fact, they have dropped significantly recently. The volume of trade, or the daily turnover, in Forex is in the trillions compared to only billions in stocks.
Eight major currency pairs account for the major share of Forex trading, whereas in stock trading only 20% is occupied by major S&P 500 stock accounts. This allows you to focus on fewer instruments compared to the 2,000+ stock listings.
Round the clock trading, 24/5, is a massive attraction for Forex traders in contrast to the 8-5 daily trading hours of the NYSE.
How To Start Trading In The Forex Market
Start slowly, and do your homework. It is worth putting in the time beforehand to learn as much as you can to make your trading more profitable and less of a risk. Yes, there is a risk, as in any trading activity. That is why it is imperative to trade profitably, and you need to learn how to accomplish this.
A trading plan is a good start; here you can identify your strengths and weaknesses and its a comprehensive tool to base your trading decisions on. A good trading plan should take account of:
- The time you want to dedicate to doing this
- Your motivation – remembering Forex trading is not a get rich quick scheme
- The capital you have available for trading
- Your attitude to risk – Forex requires a dedicated approach and is not about gambling or lady luck
- Your risk management tools
- Trading strategies
- Record keeping
The next step is to research, research and do more research. You can take online courses in Forex trading that will introduce you to the basics and guide through the setup. They will also include learning the various analysis to help trade well, what to look for in a trading platform and risk management.
Choose a trading platform that is regulated, licensed and offers a demo account for you to practice on before you start using your cash. Check out trading platform software that will work on your mobile devices if you want some flexibility in when and where you trade.