By now we have all heard of forex trading: the popularity of this type of investment has grown exponentially in recent years, and today it is the largest market in the world. No other market moves more money than forex trading.
So, more and more people decide to give themselves to the forex. Are you wondering if it is appropriate to start trading? We have compiled a list of 7 reasons to start trading forex because of course we believe it is a good investment, given the opportunities offered by modern platforms. Remember before starting, as always, that investing in forex involves risks that should not be underestimated: do not invest more than you are willing to lose. Let’s begin!
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1. Making forex trading is cheap
Given that most forex brokers take advantage of economic conditions to start trading, making forex trading has never been easy and affordable for everyone today. Even the best brokers have initial deposits of a few tens of dollars, and offer the opportunity to invest a few dollars per position.
2. The forex market is the largest and most liquid in the world
As already mentioned, the forex market nowadays has an importance that is not even comparable to that of the other investment markets. We are talking about 6,000 billion dollars a day of traded money, which makes forex trading the most liquid market in the world. However, different parts of the forex market have a different amount of liquidity: for example about half of the total market movement is due to euro-dollar exchange only.
3. A market open 24 hours a day
Unlike the stock markets, open 8 hours a day, on the forex market you can trade 24 hours a day, 5 days a week. Except for the weekend, you can trade at any time of day. However, the fact that the market is open full-time does not mean that traders always operate with the same intensity. Usually it is preferred to invest in the hours when two market segments overlap, in particular when the European and American sessions overlap.
4. Many ways to develop your own strategy
The forex market is not limited to euro-dollar: there are many currency pairs on which to invest, making the trading experience varied and exciting. In forex trading it is essential to adopt a strategy to be followed to maximize profits and limit losses. Thanks to the many opportunities offered by brokers, it is easy to develop a winning strategy.
5. You can earn by going in “short”
In forex trading, you can not only earn on the assets you think will grow, but also on those you believe will fall in value. To “go short” means a strategy where the trader asks the broker for a loan of shares of a certain asset that is falling in value. At that point the trader will sell those shares at the current price resulting in a negative position. In this way, if the price goes down again, the trader can buy back those shares to sell them back to the broker, earning a profit. However, the price could even rise to infinity, so this strategy turns out to be rather risky.
6. Information and technical analysis accessible
Forex trading is not a game of luck, and if we are going to make money, we’d better have a clear idea of the market we work on and its trends. Thanks to any forex platform it is possible to analyze the charts and use technical tools that facilitate the forecasting of market movements.
7. Learn more about the world of finance
The practice is undoubtedly what helps us make our theoretical notions better. Given that today entering the world of forex trading is so simple, it is worth taking advantage of the opportunity to immerse yourself in the world of finance and investment and discover many strategies aimed at increasing our earnings. The experience is always convenient, it is investing some of our savings in forex is something that, even if we will suffer some loss, will enrich our skills.