5 Reasons to Trade the Forex Market

The forex market is one of the most rewarding paths you can take when it comes to making money online. Prior to the late 1990s, forex was limited to institutional investors and not the everyday individual.

However, due to the advent of the internet, retail investors have had the opportunity to take part in this multi trillion dollar a day industry. Manny brokers now offer regular people to get a chance at making money in this highly volatile market.

With great reward comes great risk and this is true of the forex market. About 18% of people who take part in it consistently make money on a regular basis. The other 82% lose money. Does this mean that you should stay away from it?

The answer to this is yes, if you are not educated on how forex trading works. Getting into this industry without a clear understanding of it is a recipe for disaster. It is a quick road to joining the 82% who don’t make money.

Before you Begin Forex Trading

Due to the risky nature of this industry, here is the path we recommend if you want to actually make money in this industry.

Educate Yourself

The first thing that you need to do is to educate yourself about the forex market.  There are a number of resources available all over the internet where you can receive the right education before embarking on this journey.

Our recommendation for premium education when it comes to forex trading is Cash FX. This is a paid platform but the education you receive here will more than make up for the monetary investment you make.

You can also get some free content on YouTube and learn but you will often get incomplete content that you need to piece together. This will take you a lot longer to get to a place where you have the sufficient education to trade profitably.

Open a Practice Account

Most online forex brokers will set up a practice account where you can trade with faux money in real time. This gives you the chance to practice trading in general as well as to implement the strategies learned before investing real money.

This step will allow you to build the necessary “muscle” before getting into the main arena. You will quickly discover that trading requires a lot of discipline and emotional maturity if you want to be successful. Having a strong educational foundation will help greatly when it comes to emotional control.

Top 5 Reasons to Get into Forex Trading

Now, let’s look at the top 5 reasons for getting into forex trading.

  1. Low Barrier to Entry

Before the internet, only institutional investors were able to get into this lucrative market and they basically monopolized the market. When the internet came along, it provided an opportunity for retail trading which opened the field up for the regular Joe.

You don’t need a license or any other qualification in order to start trading in the markets. All you need is a the required deposit and you are ready to go.

  1. Start Up Costs Are Low

It started off being expensive to get in because the minimum investment thresholds were quite high at the time. As more brokers got into the field thereby raising the competition levels, the minimum threshold got lower and lower to a point where you can start trading with as little as $5.

There are people who have started off with $5 and have been able to grow their accounts into hundreds and in some cases, thousands of dollars all within a relatively short space of time. Though this is not a common occurrence, it still happens quite often.

  1. `Time Flexibility

With forex trading, you don’t need to be on your laptop 24/7 but you can pick a time block where you will be available and work around your own set schedule. However, when the trades begin, you will need to actively monitor them.

  1. Possibility of High Returns

As mentioned earlier, there is a high possibility of earning quite a substantial amount of money with little initial investment when you make the right calls. Making the right calls is as a result of a solid educational foundation that allows you to read the market trends and make educated guesses.

When it comes to forex trading, not even the most experienced trader is going to win on 100% of their trades. The idea is to make sure that you win on more trades than you lose meaning that if you get  out of 10 trades each time, you will make a profit.

  1. It is Highly Liquid

Liquidity is the offspring of a healthy supply and demand scenario in the markets. Forex trading is an industry that has high demand and supply levels almost all the time. This makes it easy to liquidate your funds.

This one of the major reasons that this industry is so attractive to a lot of people. When you make your profits, you will always have willing buyers.

Concluding Thoughts

Forex trading is a great industry to get in to and you can make a lot of money provided that you take the time to educate yourself first. There are, however, no guarantees. Market dynamics play a huge role and world events often play a role in what happens in the market.

An agreement or disagreement between major world powers can affect how the markets react. You need to be aware of these and also be mindful of the impact they may make on forex trading.

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