Every day, trillions of US dollars are traded on the forex market. If we draw our attention over the exact figures, then the forex market is a daily market of worth 5 trillion US dollars with over 9.5 million people in this world involved in online trading of foreign currencies.
So, 1 in every 781 people in this world is involved in forex trading. Further, if we rule out the people who do not have access to internet services, then 1 out of 396 people are trading on Forex.
It is one of the largest and most liquid markets in the world. Now, the big question comes in the picture Is forex trading a really good investment option? In this article, we aim to discuss the risks associated with trading in the forex market and highlight the benefits of investing in a forex market!
What is forex trading?
Across all the available trading options, such as stocks, digital currency trading, gold trading, etc, forex trading is still the most prominent one. Forex trading is all about exchanging the physical currencies in real-time over an exchange platform. For this mode of trading, there is an involvement of a buyer and a seller, who agrees to exchange their currencies at a rate that is favourable to both of them in real-time.
How to make money on Forex?
The economics behind the trading on the Forex market is similar to the basic demand-supply concept. It means that one must buy a currency when the price is low and sell it off when the price jumps. The best way to maximize the overall profit is to use leverage.
The physical currencies are traded widely over the forex market, and the major participants are businesses, governments, and the daily-investors.
Why people invest in Forex?
Now the thing that pops up in mind is that although, Forex is a high-risk market, where the prices of the physical currencies change abruptly. The question arises, why are people investing their time and money in it?
The reason is that, though the Forex is undoubtedly a high-risk market, at the same time, it is one of the fastest money-making markets. Some of the key features of this market are as stated herewith, which is the main attractions among the traders:-
24/7 market
One can trade any time and any day, as per the convenience. Forex market is active all-times a day.
Great liquidity
Big transactions can be done with a few minutes. This is one of the best features associated with the Forex, which attracts the investors.
Minimal charges
One needs to pay the difference between the bid and ask price, other than this; there are very minimal charges.
Low starting investment
Forex market offers an option to choose leveraged trading, which means you will have to put a small percentage of the value of your trade as a margin. This drops the overall investment cost.
Convenience trading
Anybody can trade over the forex market from any part of the world, regardless of their financial background. There are several accounts plan, that one can choose depending upon their choice.
“Every trader has strengths and weaknesses. Some are good holders of winners but may hold their losers a little too long. Others may cut their winners a little short but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach.” -Michael Marcus, Forex trader
“The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.” -Paul Tudor Jones, Founder of the Robin Hood Foundation
In the past few years, a drastic change in the choice of traders has been observed. Investors are giving up stocks and bonds. Instead, they’re looking for something more convenient, easier and friendlier. This is why many have turned to Forex trading. Though Forex can be a bit risky, it can deliver far more benefits than the other available options.
