Here we gathered the most interesting of common myths about trading on Forex.
Top reasons to become a Forex trader
So many people dream of a successful start-up of beneficial business project, but they neither have business plan, nor considerable investment capital. This might be crucial for many business spheres, but not for Forex trading.
The Foreign Exchange Market is a global, worldwide, decentralized financial market for trading currencies. It has unique characteristics and properties that make it an attractive market for investors who want to optimize their profits. The Internet makes the process quick, convenient and very simple. Forex trading does involve risks, but alternative investments have better returns.
So, let’s discover the main reasons encouraging people to become Forex traders.
Small start-up capital
First of all, anyone with a little money and patience can become a Forex trader. The average Forex broker requires at least $300 to open an account and start trading, but there are very attractive offers of standard, micro and even cent accounts with initial deposits starting from 1 U.S. dollar. Floating spread from 1 pip, 200 open positions and pending orders, leverage up to 1:1000 – all included. Sounds great, isn’t it?
Zero broker’s commission and free trading platforms
Most Forex brokers charge no fees, commissions, or hidden charges. They earn their money on the difference, called the spread, between the buy and sell price, typically a few ten-thousandths, called pips, of the price. Depending on the lot sizes traded, a typical two-pip spread to open and close a position can cost anywhere from $0.20 to $20. Moreover, Forex brokers typically provide free full-featured trading platforms and data feeds, and the better brokers offer extensive archives of free training materials and market analysis.
Convenient trading time
Another good reason to become a trader is time flexibility of [Forex] market, what is extremely convenient for individuals who have a busy working schedule. The foreign exchange market is highly dynamic all day long with price quotes constantly changing. It is the only market that truly operates 24 hours a day and five days a week. That is why traders do not need to worry about market opening and closing hours and are free to arrange their trade anytime they want.
The foreign exchange market is the largest and most liquid financial market in the world. A liquid market is one that has many buyers and sellers. The more buyers and sellers at any given moment are present, the more opportunities traders have to get a fair market price to buy or sell currency pairs. The more liquid a market is, the less likely it is that a few big players can manipulate prices to their advantage. Indeed, unlike in stock markets, even the biggest players will have trouble manipulating the price action in major currency pairs beyond a matter of hours.
Innovative solutions to trade on-line
Latest technical solutions, trading software and all kinds of support and market technical analysis tools represent another reason to try you as a Forex trader. More and more Forex trading platforms appear each year and there are even more regular updates for established Forex trading software.
Compared to many other online trading markets, technological advancements are definitely why Forex is one of the most innovative ways to trade online.
The most frequently asked question of beginner traders is "How much money can I make?" Surely, the more you invest, the more you are able to win. Let's assume you want to invest only $100 per trade and you adjusted your profit goal to $100, too. Now you can make at least 10 trades, because only if all 10 trades are losers you'll lose the $1,000 you are willing to risk. I don't want to become too mathematical, but statistics says that the probability of having 10 losing trades in a row is less than 1%. Therefore it's highly likely that you will have a couple of winners within the 10 trades. If your trading system shows at least 60% winning percentage performance, you should make $200: 4 losing trades * $100 = -$400 + 6 winning trades * $100 = $600. Seems to be not bad? For comparison, average monthly salary in many European countries starts with a sum equal to 225$.
Everyone can truly become a millionaire
Probably the best example of day trader is a USA-based self-made millionaire, Timothy Sykes. He is one of the leading figures in the world of penny stock trading. While $12,000 may seem like a great deal of money for most high schoolers, Timothy Sykes saw it only as an opportunity for future profits. He began day trading penny stocks while in high school, using this Bar Mitzvah money. Incredibly, he ended up making over $1.6 million by age 21. This was the start of his lucrative career, and is undoubtedly one of the most impressive feats of his life.
Forex market has unique characteristics and offers unlimited opportunities what make it an ideal trading environment. In this way, millions of novice investors choose to trade Forex, as they want to optimize their profits and get real competitive income on regular basis. It is really exciting financial world for those who are ready to risk in order to hit a jack pot. So, why don’t you try too?
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We’re happy to share with you the best books about Forex trading, that will not only help beginners but also will give some valuable hints to experienced traders.