Forex for Beginners: Pros of Forex Trading Are you considering a career in forex trading? Forex day trading can be a lucrative, highly fulfilling career, but it’s also a high-risk investment endeavor. So how can you tell if forex is right for you? We’ve compiled some of the advantages, as well as a quick look at disadvantages, to help you carefully consider a career in forex. (And if you’ve already decided that forex trading is right for you, you might want to consider the Learn Forex course from Learn To Trade.) Forex Trading Pros There are many different reasons day traders choose to invest in the currency market. For one, the Forex market operates on a 24/7 schedule and it provides low costs compared to stock investing. Plus, forex offers a relatively easy entry into the market, as there are a variety of forex learning courses and applications available that can help aide traders at all levels. Here’s a quick look at some of the pros: 24/7 Schedule: The Foreign Exchange market is open around the clock. Because of this, a trader may choose to invest during free time or on weekends, before making the jump into full-time day trading. Additionally, this enables traders to enter trades whenever is convenient to them, which is especially advantageous to short-term day traders. ●Low Brokerage Fees: Many financial markets require traders to pay commissions to a brokerage. Forex trading, though, doesn’t require traditional commissions. Instead, brokers make money on currency pair “spreads” – which are differences in the buy and sell price of a currency. This means traders keep a greater share of their profits, which is a clear advantage.
●World’s Largest Market:The Foreign Exchange market is the largest market in the world, with a massive pool of participants and billions of dollars in value. In other words, there is a much higher volume of liquidity in the market, which ensures that trade orders are filled without drastic fluctuations in price. Also, unlike the equity markets, there aren’t large price jumps during opening and close hours, because the forex markets stay open 24/7. ●Less Capital Required: Compared to other securities markets, a trader can begin trading with a smaller initial investment of capital. Plus, for the amount of capital invested, traders can leverage their capital more effectively for greater profit potential. ●Trading Flexibility: With more than 28 major currency pairs to choose, traders can quickly switch between one or more pairs to maximize their investment potential. This also enables a trader to determine trends across the entire forex spectrum and place trades that are the most advantageous, enabling the trader to take advantage of market volatility. What are the disadvantages of Forex trading? You’ve seen the benefits of forex trading, but there are some distinct risks involved in forex trading. It’s important that anyone considering forex trading understand the risks involved. So what are they? For one, forex is a broker dominated market, and as such, there’s not always full transparency for day traders. That means traders don’t have a great level of control over how their trades are being filled and the price that they pay. Additionally, there are high levels of risk involved in the forex market. For example, high-leverage trading is available, which maximizes profit/loss exposure. Because of this, losses can quickly add
up. That’s why it’s important for every beginning investor to develop in- depth knowledge of trading before jumping in. Finally, forex markets are based on a variety of factors, including macroeconomic, governmental and even environmental events. That creates a high level of volatility in the markets. For example, if a country were ever to leave the Euro Zone, the euro would likely experience a huge swing in price. If you were holding euros, there’s not much you can do but sell at the current price. Currency trading can be fun, fulfilling and lucrative. But you must have the experience and tools in place to maximize profits and minimize risk. Taking a course – like Learn Forex from Learn To Trade – can help you gain the knowledge you need to start your forex career today. Presented By Learn To Trade