Reasons why you should Trade Forex
Reasons why you should Trade Forex
Forex trading by individual traders (retail
traders) is getting more popular as time goes on. Despite this some are still
wondering why they should trade Forex. Some have said its gambling. If Forex is
gambling what then is the stock exchange? Is there any assurance on where the
stocks will move to? No. It depends on market forces and information. Some have
bought stocks for years with no dividend and capital appreciation to show for
it. So, like the stock market, Forex is information based. Mind you, we are not
in the stone or jet age but information age. The right information will assist
you to trade profitably. The following are the reasons why Forex is so
attractive to so many people.
Here are a few reasons why:
1. Trading Size: The size of the Forex market is
unprecedented and unmatched by any other global market. The huge number between
of 2.3 and 5.1 trillion dollars is what is estimated to be traded daily in the
Forex market. This causes the initial attraction to new traders.
2. Better Training: The awareness level on forex
have increased compared to previously. When forex first came to Nigeria, most
people lacked laptops or computers. They attend a 2-hour conference and then
zoom off to a café to burn off their money. The seminarians teach then people can
double their accounts in 2 hours. That’s possible but the same account can be
lost in 2 hours! Mobile trading on phones are now available for traders.
Internet access and speed have greatly improved. Today so many training
opportunities are available, both online and offline. Training is very cheap
today and is articulate.
3. Account opening is simple: The process of
opening a Forex account is not complex but simple. All you need is a valid
means of identification and proof of residential address. It’s as simple as
opening a bank account.
4. Funding account and withdrawal in local
currency: The advantage of funding, withdrawal and even trading in local
currency is a big plus today. In the earlier Forex days in Nigeria, domiciliary
accounts and funding in foreign currency is a must. It is now possible to
credit deposits and issue withdrawals within hours.
5. Accessibility: The Forex market, as opposed
to any other market, is open around the clock. You open it on your laptop any
time you wish five days a week for 24 hours. You trade money from the comfort
of your own room or place at any time during the day and night. This is of
course magnified by the internet and the constant access to the worldwide web
from anywhere on the globe.
6. Equality: This is a direct result of its
size. As opposed to other markets, the Forex market is so huge, it cannot be
effected by one individual person or institution. So, the retail trader, for
all intents and purposes, is on the same “level” as the largest bank
when it comes to Forex trading. The Forex market cannot be manipulated.
7. Leverage: You do not need huge amounts of
money to be able to trade huge amounts of currency. Almost all Forex brokers
today offer a minimum of 1:100 leverage on your trading deposit. Leverage has
its advantages and disadvantages. Leveraging makes losses to exceed initial
deposits and capital to be at risk if care is not taken. Carefully consider why
you are investing/trading, your level of experience, and your risk appetite
before you decide to trade Forex or any other financial instrument. We work
hard to offer you worthwhile, time tested information about forex. Most brokers
provide continuous training and forums (offline or online) to traders. Daily
market analyses are given
to traders to help them
in creating choices in trade. Entry levels
for deposits have conjointly been
reduced to accommodate the economic reality.
A trader can begin now with as little as N5000.
8. Availability of Demo accounts: Demo accounts
are available for free. They are meant for practice trading and also to build
trading skills that have been learnt. Real time currency market news and
charting service is on 24*7. The demo account is a live account but imaginary
money is used for trading.
9. Volatility: The Forex market rarely stands
still. Not solely is
it perpetually moving,
it is making large movements. Large volume transactions and high liquidity
combined with fewer commercialism instruments
generate larger intra-day
volatility within the currency
market which will be
exploited by day-traders. Volatility for the
most liquid stocks are between 65 to 110. Volatility for currency trading is
approximately 555.
10. Transparency: With the Forex market, what
you see is what you get. Analyze the news, read the charts, there are no
surprises. If you recognize what you’re doing, you can predict the
direction of the market, with relatively high percentage accuracy. This
is perpetually a bonus once considering an investment.
Are you baby-faced with
the danger of being stunned by
this event or another which will have a control on the market and its
movements? It is strongly advised that you
should trade for yourself and not rely on any one who claims to be experienced
to trade for you. You can learn from someone but please trade for yourself.
11.
Career openings: Traders, consultants, analysts, marketers, sales personnel,
operations personnel, signal providers, trainers, partners, representatives,
and a couple of others make a living from Forex. Signal providers inform the
trader who can’t read the market well of when to buy and when to take profit
and avoid losses.
12. Profitability: The Forex market is a two-way market, you are always working with pairs, so if one currency is decreasing another is increasing. There is always the probability to make profit in the world of Forex. Besides the plain potential for profit in Forex commercialism, there is also another element that is exclusive to Forex. You can profit regardless of that direction the market goes.