Forex gives you trading opportunities 24/7, and liquidity is high. That makes it attractive for traders around the globe because you can observe movements in the economy and speculate how that will affect the market. Being decentralized it gives everyone an equal chance of buying and selling.
What Forex Offers
The average trading volume in 2020 on the forex market is around $7 trillion per day. Yes, trillion! So if there isn’t a chance for some smart moves here, we don’t know where else it is. There are many opportunities for trading if we observe eight currencies, including four major and four minor. The major ones are:
- EUR/USD (euro/US dollar)
- USD/JPY (US dollar/Japanese yen)
- GBP/USD (British pound/ US dollar)
- USD/CHF (US dollar/Swiss franc)
When we say 24/7
We do mean that but during workdays. Nevertheless, it makes it super accessible and gives you the ultimate freedom to decide when you want to trade.
Commissions and Leverage
Leverage means you can buy or sell large amounts of currency that are traded on margin. Be careful – you can gain a lot but also lose. So be prepared before any move you make. Another useful Forex detail is that they offer low fees except paying for a bid. If you are a company, it might happen that you don’t have to pay anything at all. That’s why traders like Forex so much. Still, when choosing a broker company, you should pay attention to fees and aim for quality but low costs.
Finding a good broker
If you are starting, education and a good broker are your best friends. So, how do you carefully select a forex broker? Every broker is bound to have positive and negative qualities, but the best broker is the one who can get your vibe (and is a regulated one). He can figure out what you want if you are not sure, help you achieve specific goals, learn more, and assist you when you need it. He can help you with the platform, explain to you different trading ways, and make the process easier for you. Don’t rush it, even if you think you found the right one. Take a step back, think for a bit and if your gut and your brain say “yes” together, then go with it.
Trading Platforms and Applications
Trading platforms can differ in small things, which doesn’t mean everyone will suit you. Maybe you will go with a demo account first to figure it out and later start a real trading account. The catch is not to get carried away and think you are not trading real money once you switch to your trading account where you invest your savings. There are also many mobile applications, which can be great for beginners, but be sure they are safe and check with people around you if they use any.
Two Common Mistakes to Avoid
1. Trading impulsively
Many traders can be led by their emotions, especially if they are in debt or invested too much. That is why we said you shouldn’t invest more than you can afford to lose. Usually, when you are in a losing position, you will end up losing money and time. It’s important to remember that the market is very liquid and that fluctuations happen very often. That means that you should consult with a broker you trust and see if you should leave the money where it was and wait, or pull out.
2. Trading Right After Big News
Yes, news influences the market and can bring downfall or uprise, but that doesn’t mean you should forget about your trading plan and damage your efforts. Significant gains can quickly turn into big losses because of sharp market movements, so be careful about that as well. Wait on it a bit, and then act.
NOTE: As with any investment you may want to check with a financial advisor