Today, we have a guest post from Bwayan Jordison who will talk about forex trading.
Let’s read what he has to say below.
With its high volatility and high sensitivity to world events, people often call the forex market the riskiest market in the world.
However, despite its risky nature, forex trading is emerging as a very attractive alternative for the Filipino investor who is looking for more immediate profits.
Trading currencies brings its own set of advantages that make it a viable and lucrative investment.
Think you have the guts to try forex trading? Then here’s what you can expect as a forex trader.
A surprisingly low cost of entry
Did you know that you could enter the forex market with $100 or less? It’s true. Brokers allow potential traders to access their services with a relatively small outlay.
The key to this low cost of entry is the concept of leverage. Leverage comes from the root word lever, which is a device used to carry heavy weights with lesser force.
The same concept applies to the forex market, where brokers will allow you to control a larger amount of money with a small investment (for example 100:1, where $1 invested translates to $100 in the market).
Without leverage, you would need very large amounts to even begin to realize profit.
Trade any time, any place
If you’ve been involved in the stock market before, you’re familiar with the schedule of the Philippine Stock Exchange. This can often be a problem for people who have day jobs or who just don’t have the time to check the market regularly.
Forex traders, on the other hand, have the luxury of time and space. The forex market almost never sleeps, and trades are happening on every corner of the globe 24/5.
You can trade at your own time and pace, without having to conform to set schedules. In fact, with most brokers now having an online presence and a large variety of trading platforms, you can trade while relaxing in Boracay – as long as you have internet access.
High activity with trades
Make no mistake about it. You won’t make money on the forex market if you don’t trade actively. If you’re used to passive investments like real estate or mutual funds, forex trading might come as a surprise.
To be truly successful, you’ll probably need to learn how to analyze charts and patterns (technical analysis) and also know the various data that can affect a currency’s direction (fundamental analysis)
But that’s part of the fun right? With forex trading, you get a chance to chart your own destiny.
High risk-high reward market
It’s very possible to double your money or more in the forex market in a short amount of time. The earning potential of the forex market is great, but it comes with a caveat.
As the adage goes, high rewards always come with high risk. You can just as easily lose your money in a blink of an eye if you do things haphazardly and go trading without a plan.
Perhaps more than any other investment vehicle, practicing the proper way of risk management is crucial to becoming a successful forex trader.
The most exciting market
As the most volatile and liquid market in the world, the forex market is constantly moving, with trillions of US dollars traded daily. And that’s not even taking into account the news and economic data that greatly affects the market.
Changes in prices can happen in a split-second, so forex traders should always be ready to take advantage of any profit opportunity.
Win or lose, you can always expect action.
A highly rewarding investment
Becoming a forex trader will bring its own share of triumphs and heartbreaks. You probably won’t profit from every trade you make, since even the savviest traders make mistakes.
However, if you’re serious about forex trading, and are willing to take the time to study the market, you can expect a rewarding and worthwhile investment unlike any other in the world.
About the Author:
Bwayan Jordison is a gamer, toy collector and a forex trader at Metisetrade Inc.. He often write articles to help and educate everyone about the foreign exchange market.
Photo credits: Zawadzki and Juricek
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