Why do people trade Forex?
So you have probably seen hundreds of adverts popping up around your screen the moment you have started searching about forex trading.
And these adverts are telling you to invest immediately, and many of them telling you how you could earn $$$ per day from home. Let’s not kid ourselves, earning money is good. But its not everything. We have had years of experience as a traders and a trainers, and hundreds of conversations with people about trading and what they enjoy about it the most. We’ve broken it down into two main sections. One is focused more on the money side, and the other the lifestyle.
Forex trading is high risk, but it is also high reward.
There is no way to completely eliminate the risk but with proper training and strategies you can reduce your risk, and the rewards can be fantastic. When comparing it to the more commonly known stock trading, Forex wins every time. Unlike stocks which are traded at central exchanges, Forex is traded between thousands of world banks and is available 24 hours a day.
On average, about four trillion USD are traded per day. With busy days hitting the twelve trillion USD mark. This dwarfs stocks, and with all this liquidity we find that there are far more trading opportunities. With Forex, your earnings can potentially keep increasing every month at a much higher rate than inflation.
Above and beyond the potential to earn an amazing amount of money, being a forex trader comes with other perks to make your friends jealous. One of the largest factors is time.
If I’ve hit my monthly target already and made a couple extra bucks, I’ll often take the rest of the month off. In many ways it is like running a business, but you don’t have the excessive overheads and other headaches that come with it. You don’t have staff, most likely you’re trading from home so no additional office space rental to pay for etc.
This doesn’t mean you can slack off! You have to put in the hours if you want to see the returns. But it is as flexible as you need it to be. If you’re a family person, you will never need to miss those important milestones in your kid’s lives.
If you’re single, then you have all the time in the world to impress that special someone!
Risk and reward
A lot of a trader’s day is not that interesting. We probably watch more Netflix than is healthy for any human! But then there is the trade itself and the rush that comes with it.
Spotting trends, waiting for things to line up, finding the right pattern and entry. Then you put your money on the line, you have your stop loss and take profit set. Even now, after 15 years of trading I still get a thrill when I watch that profit number turn profit and the market moves towards my take profit. It’s not for everyone, and a lot of people can’t handle this stage of being a trader, but for those of you who can and actually enjoy it then you can do very well.
Benefits of trading forex
Unlike traditional platforms, you can trade forex 24 hours a day during the week.
This is NOT recommended though! But the ability to login and manage your trade at any time gives you much more control, so you can push for more profits or cut losses earlier than traditional stocks. Trading forex also has much lower costs than trading with exchanges. You could place a trade of $50’000 and pay as little as $20! Costs are also in upfront, so when you make profit that is all yours to keep!
The forex market also has much higher liquidity than stocks. This means that there are more people looking to buy or sell, which allows you to get in and get out of trades much quicker. People often show massive profits in stocks, but they rarely talk about how hard it is to sell those stocks at the top! We don’t have that issue in Forex!