STAGE II – WHY
Before taking up any job, course or even a habit, what is
important is to understand why exactly do you want to take it up?
There always has to a reason for things to be done by you. When it
comes to Forex market, investors have recently started rushing in,
as more and more traders have now started earning their living
through trading foreign exchange. All these investors trade Forex
for many reasons, the main one being the superior returns which
they are likely to get back. Apart from this, there are also many
other factors which create an exclusive investment atmosphere for
the traders in Forex, such as:
Being a 24 hour market, there is always some investor, someplace
in the world whom you can trade with as so many such traders are
dynamically trading foreign currencies somewhere in the world or
another. This also enables these traders to respond to any latest
news of the market, without delay.
Providing a 24 hour trading opportunity, you can trade anytime
from Sunday 5:00 pm (ET) to Friday 4:30 pm. This gives traders a
chance to trade according to their convenience, like going to bed
or spending time with their family, or going by their own
Forex as a market contains high levels of liquidity, leading to an
even higher degree of transparency in the big sized transactions
and lots of money changing hands. Being the largest financial
market in the world, Forex changes more than $2 trillion hands
Being such a large and liquid market helps Forex attract enormous
players, some retail and some large scale.
With “free of commission” trading, many dealers believe is a
perceived benefit of Forex. Forex trading lets its investors keep
100% of their trading profits. Although this does not change the
high degree of business deal costs being paid to the dealers via
the bid-ask spread, this free of cost trading makes Forex an even
more lucrative business opportunity for the traders as well as the
Forex market offers higher leverage and with its lower margin
requirements it enables the Forex traders to trade with much
bigger sum of currency as compared to their initial deposit.
Leverage mostly also depends on the type of Forex broker an
investor has chosen for trading.
Think about it this way, where would you find a trading market so
partial to an investor, at least apparently. But to make the most
of these factors, it is equally important for you to be aware of
their shortcomings as well.
Surely all these factors like liquidity, leverage, convenience,
and transaction costs can be used as money making tools, but so
can they be used for losing all your funds. Yes, of course
anything if misused or over used can result in harmful ways.
Everything benefits to a limit, with a skill and method to use it
And this is what makes a difference between a beginner trader who
might use these tools in all the wrong ways to destroy his wealth,
and the refined investor who will have the experience and
expertise to use them all to create wealth.