American business magnate, Warren Edward Buffett is well known to the world as one of the best investors. He once said, “If you want to be rich, stop relying on just one single source of income”. If we deeply analyze this saying from the world’s one of the richest men, then we will agree to the fact that merely doing 9 to 5 jobs, can’t land us among the lists of the riches! We need to have a well defined strategic plan to bring our earning goals into reality!
There are many secondary options that one could have to make some good revenue out of it and among those options, investing in Forex is one of the very good choices, that can give some impressive results. But, sadly, like other forms of trading in the financial markets, some people find it difficult and complicated to understand.
In this article, we will deeply analyse all the ins and outs of Forex trading and will try to understand whether Forex is a difficult trading market.
What is Forex?
Forex is the foreign exchange marketplace where buyers and sellers meet online for the trading of the physical currencies in the real-time. There are around 10 million Forex traders in the world which means that 1 out of every 750 people is a Forex trader.
How does it work?
Forex is a highly volatile market, where the price of the physical currencies abruptly changes. Forex works as per the economics of demand and supply.
This means that when the demand rises, the price of the commodity rises ( here, in our case commodity refers to the physical currency). While, when the demand falls, then the price of the commodity drops in the same proportion.
To make a profit, the buyer invests in Forex when the price of the exchange pair is less and sells it off when the demand is more in the market.
Why do people consider it difficult to trade in Forex?
Everybody has their perception. For some people, Forex is an opportunity to make huge profits, while, for others Forex is putting money at risk. Keeping both these aspects under consideration, we will find that the major reason why people fear trading in this form of market is that the majority of the Forex trading which is done globally is done by leading banks and financial institutions.
Both these entities, have excellent knowledge, years of experience and technology resources in comparison to the individual traders. As a result, the individual traders who are into this domain, find it difficult to predict the market movements and thereby find Forex difficult.
Experts views
“The financial markets generally are unpredictable. So that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.” ― George Soros, billionaire, trader and investor
“Always make confident that you are wise with choosing the services for your trading activities. Ensure that you will get the most reliable predictions available today.” ― Pam Sotiropoulos, a professional forex trader
Although, Forex is a high-risk market. But, at the same time, we must not ignore that there are over 10 million Forex traders in the world and not all are failing. Some are making huge profits out of it and others are not able to make anything resourceful out of it. So, it all depends upon the strategy that one is adapting while trading in this market.
