Globally, people are interested in business ideas that guarantee a steady source of income. It becomes more attractive if such ideas can be implemented at their convenience without affecting their income negatively.
The increasing popularity of Forex trading can be attributed to the ease of trading and the guaranteed steady flow of income from the business.
However, traders have better chances of establishing themselves as successful traders if they know the ropes and trade on the best platform that will supplement their efforts, thereby boosting their chances of making wise trading decisions.
This article takes a look at some of the reasons why you should consider Forex trading and how to mow down obstacles, even if you have zero trading knowledge.
What is Forex Trading?
Forex Time defines Forex trading as the “global, over-the-counter market (OTC) where traders, investors, institutions, and banks, exchange, speculate on, buy and sell world currencies.” It is also a “decentralized global market where all the world’s currencies trade”. Thus, on these markets, currencies are purchased and traded by organizations and individuals with a view to making a profit on their investment.
While the definition focuses on currencies, Forex trading is not limited to them. Forex trading also includes trading:
- Crypto assets: The cryptocurrency industry is a multi-billion dollar industry. It has turned several investors into multimillionaires since its launching in 2009. The Telegraph article “Top 9 Richest Crypto Investors Ranked” gives an insight into how profitable crypto asset trading is. Thus, most Forex trading platforms support trading digital currencies.
- Commodities: You can also trade commodities. Notable commodities that are traded on Forex trading platforms include wheat, crude oil, cocoa, coffee, and other related commodities. You stand a good chance to make a fortune from commodity sales if you know the fundamental trading skills required to trade them successfully.
- Stocks: Notable investors like Warren Buffet make the bulk of their net worth from stocks. As an investor or trader, buy shares from well-performing companies and trade them on Forex trading platforms. It is another great way to increase your financial power.
Forex trading ensures that you have a wide range of investment options to choose from. If you know your strength, trade any of the business ideas you are comfortable with. A good background check of these options will fortify you and help you to invest wisely.
You may be wondering while it is worthwhile to trade Forex. Consider the following benefits of Forex trading:
- Low Transaction Costs: Another big plus about Forex trading. Starting from the ridiculously low retail transaction fee that is far below 0.1% for smaller transactions to the 0.07% for larger transactions for the bid/ask spread, Forex trading offers you low transaction costs that may have a huge impact on your profit.
- No Commissions: Forex traders are charged zero fees for their transactions. You won’t pay any government fees, clearing fees, or other fees that may eat deep into your profit.
- 24-Hour Market: Sometimes, trading on weekdays may be convenient for you. Some other times, you will appreciate the opportunity to trade on weekends. You don’t have to lose sleep over this because the market is available around the clock. The market covers the entire globe and takes advantage of time differences to be functional every minute of the day. Hence, if the market is close in your country of residence, you can find another country where people are actively trading. Leverage that.
It is pretty clear that Forex trading is designed to ease the trading process and provide traders with a platform that makes it easy to get a huge Return on Investment (ROI).
Top Forex Trading Tips
Contrary to some erroneous beliefs, Forex trading is not a game of chance. Your ability to trade successfully depends, to a large extent, on your understanding of the market. Improve your money-making chances as a trader with these expert-tested tips:
Define Your Goals
Before signing up on a Forex trading platform, it is advisable that you have a well-planned goal. Your goal will help you to have a clear idea of what you intend to achieve as a trader. Focusing on such goals may spur you on. It may trigger a desire to go out of your way to master some proven trading tricks and techniques. That’s a surefire way to make money as a trader.
Without a goal, though, you’re like someone who drives their vehicle from the beginning of the day till dusk without a specific destination in mind.
If you are new to the business, it won’t be a great idea to invest a huge sum of money in it. Only professional traders with years of experience and the needed skills can take such a huge investment step, after considering the pros and cons of their decisions.
As a newbie, it is recommended that you start with a small amount of money. As your knowledge, experience, and confidence shoot up, gradually increase your investment amount. That way, you won’t invest what you can’t afford to lose. Remember, every business is a risk.
Don’t Trade with Your Emotions
Leash your emotions as a trader if you wish to become a successful trader. This is a timely warning considering the number of traders who have lost a huge amount of money due to their failure to put their emotions in check when making trading decisions.
Learn how to control your excitement or fear. Don’t give greed or other emotions absolute control over your trading decisions. That may be counterproductive as you are more liable to making bad decisions that may lead to investment loss.
Not every Forex trader has the required knowledge and experience. An impressive number of Forex traders outsource the responsibility to experienced and trustworthy brokers. If you are passionate about Forex trading, don’t allow your lack of the necessary trading skills to stand in your way. You can hire experienced brokers to handle it.
If you are contemplating joining the Forex trading market, MetaTrader5 could be a welcome additional to begin through. Aside from all the outlined benefits associated with Forex trading outlined above, the platform also offers some incentives for traders.
Some brokers provide all the necessary trading tools for enhanced trading performance. These tools can be:
- Economic Calendar that provides up-to-date information about trading activities regularly.
- Latest Forecast/Signals for free, which helps a trader to trade with ease and comfort.
- Holidays Calendar that helps you with information about countries that are celebrating one holiday or the other and the ones available for trading.
- Currency Converter that comes in handy when making transactions in different pairs of currencies.
All these features could come very handy for any trader, and that without spending a single dime. They are offered free of charge to encourage traders and help them to make as much profit as they can from Forex trading.