Why Trade The Forex Market Should Open The Eyes Of Any Trader Looking To Impressively Beat Other Investment Opportunities
There are many markets out there for you to trade. And most people think of the stock market when talking about trading.
But I want to go over why the Forex market is arguably the best opportunity for profits, especially for new traders.
Reason 1: The Forex Market Is The Largest Financial Market. Hands down, the currency market is the largest financial market in the world with over $3 trillion per day being traded. This amount of market volume allows for greater price stability. The large size of the Forex market leads to many benefits not seen in other markets.
Reason 2: High Liquidity. Due to the massive size of the Forex market, it is also extremely liquid. In simple terms, liquidity is the measure of how many people are willing to trade at a certain price level. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell as there will usually be someone in the market willing to take the other side of your trade.
Therefore, you are never stuck in a trade.
Trading in a highly liquid market like this gives you the freedom to do what you want when you want. It allows you to trade quickly and on your terms.
If you want to get into the market at a certain price, you are practically guaranteed to be able to do so. Likewise, if you need to get out of a trade quickly in order to secure a profit or minimize a loss, you again can easily do so.
Reason 3: Low Trading Costs. You have to pay for the privilege of participating in the Forex market, just like you pay for participating in any other market. However, the costs involved in trading Forex are often much lower than when trading other instruments.
Trading costs are relatively low since you pay the spread value, which is kept low due to the number of participants in the market.
The spread varies between broker and currency pair traded, but is usually very reasonable compared to high commissions involved with trading stocks.
Reason 4: No Fixed Lot Size. You determine your own lot, or position size. This means you can control risk. Again comparing this benefit against most other markets, and this level of control and customization is simply not available or possible.
Many exchanges for other instruments set fixed contract sizes which are utterly inflexible, which makes strict money management much more of a problem.
Reason 5: Low Barrier For Entry. You can start participating in the Forex market very easily with a very low amount of starting capital. It is very easy to set up and fund an account with a broker and with mini and micro accounts you can get started with a low amount of money.
Just about anyone can afford to open a new Forex account with as little as $250. While this may be a totally inadequate amount to expect to be able to earn a living from, it does at least provide a foot in the door of financial trading and allows individuals to experience, practice, and learn the skills of trading at a tiny cost.
Learning to trade Forex is considerably cheaper and less risky than learning to trade any other instrument.
Reason 6: High Leverage. Leverage increases how much money you can command in the market. It effectively means someone will lend you money to help you punch above your weight. For instance with $10,000 and 10:1 leverage, you would actually be able to trade 1 standard lot of $100,000.
Increase that leverage to 100:1 and the same $1,000 would be able to control $100,000. In other words it makes your money go further.
Without wanting to insult anyone’s intelligence, the leverage amount let’s you trade by that factor above the amount of money you really have; 10:1 allows you to trade 10 x more than you really have, 100:1 lets you trade 100 x more, and 400:1 allows you to trade 400 x the amount you really have.
No other market in the world offers leverage at the same levels as Forex.
Reason 7: Low Margin Requirements. Margin is simply the amount of capital your broker requires you to have in your account in order to trade a certain amount of money.
If the margin requirements are low, it means you do not have to have very much money into your account in comparison to the actual amount they will let you trade.
Low margin requirements means you can trade with an amount several times larger than your account balance. For example, 1:100 leverage means you control $100,000 of currency for only $1000 in your account.
Again in comparison to many other markets, Forex is unrivaled in the low margin requirements. While you may be asked to put up as much as 50% margin in other tradable instruments, with currencies you regularly only need 1%.
Smart traders can make their money work a lot harder in the foreign exchange market as opposed to any other.
Keep in mind that increased profit potential can also mean increased risk.
Reason 8: 24 Hour Trading. The Forex market never sleeps from the Monday morning opening in Australia to the afternoon close in New York. You do not need to limit your trading to a specific time or session.
Perhaps an even more obvious advantage, and one which is most influential to new traders, is the fact that the majority of amateurs have full time jobs during the day, making it very difficult if not impossible to day trade other markets.
With currencies you can literally pick your trading hours to suit your current situation.
Reason 9: Profit In Either Direction: This is one of the more unusual aspects of currency trading which really sets it apart as unique from other markets. You are never trading the Yen, or the Pound, or the Dollar on its own, as you would when buying a stock.
Currencies are priced relative to other currencies.
Every time we trade a pair, whether we hit the buy or sell button, we are actually simultaneously buying one currency and selling the other or vice versa.
Every single spot currency trade involves the instantaneous buying of one currency and selling another… there are no exceptions to this rule.
The truth of the matter of what really happens, and this may seem like pointing out the obvious, is we are “exchanging” one currency for another (hence the term Forex – Foreign Exchange).
There literally are two sides to the story when it comes to trading currency pairs, and this trait makes it very easy for Forex traders to profit in both directions and/or limit losses in both directions.
Profit can be made in either rising or falling markets as you can buy or sell a currency pair without any penalties.
Reason 10: Manageable Portfolio. There are a limited number of currency pairs that can be traded. Compared to the stock market, where you can choose from 1000’s
of stocks to trade, the currency market is much easier to monitor because there is a smaller number of currency pairs to choose from.
And, believe it or not, you can tap into impressive profit potential by focusing only on ONE currency pair.
Reason 11: No One Can Corner The Market. The foreign exchange market is so huge and has so many participants that no single entity can control the market price for an extended period of time.
It is widely regarded by economists around the world as the market closest to the “ideal of perfect competition”. Why the “ideal of perfect competition”? Largely because Forex is a level playing field where no one person or organization is big enough or powerful enough to manipulate or monopolize the market for any significant length of time.
As you can see, trading the Forex market has many advantages over say trading the New York Stock Exchange. And this is why I prefer to trade currencies rather than stocks.
The foreign exchange market offers the most accessible and realistic opportunity to become a successful trader and build personal wealth & independence for anyone determined to take trading seriously.
You will not find any other market that offers the same advantages and benefits.
There simply are none!
But do not confuse the overwhelming advantages of trading the Forex market with some kind of get rich quick scheme.
Trading is serious business, and if you want to have long term success and collect the profits you deserve, you need to approach becoming a successful trader with the seriousness it deserves.
The Biggest Reason To Trade The Forex Market: HIGHER POTENTIAL PROFITS
I look at my participation in the Forex Market like I do any other investment opportunity. Basically, I want to put my money to work for me to make more money.
Therefore, I want the highest return on my investment of time and money as I can get… while keeping the risk within my risk tolerance levels.
My goal is to trade the Forex market profitably and make money. Obvious, right? But determining how much money we should expect to make is an important step in our success, and not so obvious.
I know what you are thinking… you want to make as much money as possible.
The problem with this attitude is not having a goal. And without a goal, no matter how much money you make… you’ll always want MORE.
So, we need something to measure our performance against to gain some perspective.
How about the average yearly gains of other popular investment markets?
We Can Beat Other Investment Markets
Investors need a benchmark, a standard or point of reference against which performance can be compared. And most investors use the S&P 500 as their point of reference, so let’s start there.
The S&P 500 Index is a basket of the 500 largest publicly traded US companies. Over the past 90 years, the average annual return of the S&P 500 has been just under 10%.
Let’s take a look at performance over a recent 20 year period…
That works out to be +5.59% average annual gains for the S&P 500 over this 20 year period.
See how the results for the S&P 500 varied greatly from one year to the next?
That is not an anomaly. That is the norm. And that is what you should expect from ANY type of investment, including Forex.
Trading Forex is no different than other investment markets… you need to look at the overall, LONG-TERM results.
That being said, I believe and my experience trading Forex dictates the potential to outperform other investment markets like the S&P 500 is strong.
My Forex Trading VS S&P 500
To give you examples of what I mean by “beat other investment opportunities” let’s look at some potential profit performance:
Here is an example of potential profits using Forex Signals Blast Off and trading only ONE currency pair:
Or, trading a very simple trading strategy I teach in Forex Trading Blast Off:
The above chart is a perfect example of how the power of compounding can take a very modest starting amount to impressive profits over time.
And if you are impressed with these possibilities, the Crypto market has proven to produce huge potential profits. This is what the strategy you can follow as either signals or learn the strategy in Crypto PROFITS Blast Off can produce:
As you can see, the potential to beat other investment markets definitely exists. There is also the potential to GREATLY OUTPERFORM those markets.
Now like I stated in the Teaching Moment above, I expect the average annual percentages to vary greatly from one year to the next, regardless of whether we are talking about investment markets like the S&P 500 or trading the Forex market.
But the potential is definitely there. That is why I trade the Forex market. It allows me to put my money to work to get the best return on my investment.
If you haven’t traded the Forex market before, or worse, tried and failed, I’m sure the potential profits I’m showing are eye opening. And I’ve created resources to help you turn this potential into real profits in your trading account.
You don’t have to reinvent the wheel and figure everything out on your own.