Many people look into stock market trading or try it out for a little while and realize the difficulties it poses. When they look into forex trading as an alternative they find it more fun and interesting than the stock market. After taking a much deeper look into trading forex people realize this market, which trades around 6 trillion dollars everyday, can lead to a path to financial freedom and independence.
The Risks Involved
As with any investment opportunity risk is involved. Taking the time to learn properly, start small, and gradually begin to increase the amounts you trade with as you grow and learn. Use the profits you make from your small trades to invest in your new trades.
Trade The Worlds Currency 24/5
What attracts people to the forex markets is the ability to trade the worlds currency 24 hours 5 days a week. The markets are unavailable during the weekend however during the week you can trade them 24 hours. Compared to the stock market that is only open during a specific time during the week and closed holidays and weekends.
A Bad Forex Trading Strategy
A lot of people begin trading in either the stock market or forex market without much research. They may invest their hard earned money on a tip, rumor, or just a wild guess. This type of trading is totally wrong. You do not need to gamble inside the forex market. Their are bonafide fx trading strategies that fit your personality and budget that will make sound trades for you. You just have to take the time to learn them.
The Challenge Of The Foreign Exchange Market
The learning process can be a bit challenging. You have to learn currency pairs, charts, strategies, pips, indicators, fundamentals and more. Their is a lot of contradictory information out there as well. You basically make trades by selecting a specific currency pair to trade and a specific timeframe like 1m, 2m, 5m, 1d, 1w, on the chart for that pair. With all of the charts and currency pairs out there, you can make over 1000 different trades at any given time.
A Great Adventure
Trading in the forex market is one of the best adventures you can be on, especially when you know what your doing. With 6 trillion being traded everyday you can imagine the quick swings up and down. It is possible to make guesses at trades and win however the most successful traders will have a strategy to make proper trades.
Making Proper Trades
In order to make a trade properly a potential investor should know what currency pair they want to trade, what time frame on the chart they want to trade, have a specific price point they want to enter the trade and an exit strategy for when the trade either wins or loses.
Be patient within the foreign exchange and you will be successful. So many people go off strategy and tend to get scared of the volitility. They might take a loss or profit earlier than they should have only to see the opposite happen.
Finding The Right Information
Many forums, articles, and trainings (both paid and free), have the correct information for potential traders to follow. You just have to learn some of the basic principles and key terms first before understanding what the potential good information is compared to the bad.
There is nothing wrong with a strategy called paper trading. Basically this is when a trader writes down trades he or she might have made in the real live markets and watches how they perform. This strategy eliminates all of the money risk and educates the trader on how to trade moving forward.
Read More: SHOULD I START TRADING FOREX?