Forex Trading – 5 Reasons to Trade Currencies
The main reason of penning this article is to list down some potential reasons for trading in the forex market. Over the past couple of years, forex trading has become a lucrative arena and allowed millions to earn stable income. However, before I may proceed, I want to denounce a big myth regarding this business. There is a difference in between forex trading & forex investing.
Investing is done for long term purposes. This involves buying currency in lots, and holding it for a long time until the currency value goes up, thereby enabling you to earn profit. On the other hand, trading is different. You buy currencies for short term purposes only, and sell as soon as the value rises. This is called speculation, which is not good for an investor. Here are the top 5 reasons why you should invest in global currencies:
1. The most liquid market – Forex market is the world’s biggest market with roughly 2.5 trillion dollars traded on daily basis, as compared to 440 billion dollars for commodity market, and 200 billion dollars for stock market. With such a high level of liquidity, one can ensure enough gains in the long run.
2. 24 hr. trading – The forex market is open 24 hours a day. This makes trading fun because you can virtually trade at any time you want. Compared to the stock market, there are specific timings from 9 AM to 5 PM.
3. Costs of forex trading – Costs of trading in the forex market are minimal as compared to stock trading and commodity trading.
4. Minimum investment – It takes as low as just $1,000 to open up a forex account. This amount is the least that I can prefer you. You can obviously open up from just $5,00.
5. Trade execution – Trade execution is almost instant while trading. You can trade forex using any robot or trading software to smooth out your trading process.
My personal experience with currency trading says that there is no way to earn income in the short run. I would recommend consulting a forex broker. In one of my other articles on Ezine, I have emphasized on the importance of selecting a forex broker for your trades. It is better to spend some money on consultancy, rather than losing the entire amount you would spend in your first instance. Forex trading is a lucrative area of business, but without hit and trial method. As you increase your time in trading forex, you would definitely witness success down the road.