Given that it’s just one of the many financial markets open for trading, why do so many people trade forex? Forex trading is undoubtedly lucrative, and smart traders can get themselves a windfall or two with the right time and analysis of the market. It’s also incredibly accessible: almost anyone can get started with forex, with sometimes as little as $100 to deposit in their live trading account. So, is forex trading something you should get into?
The pros of getting into forex
Forex trading is a viable choice as a career, and there are plenty of advantages to getting your hands into such a market. Here are some of them:
- Good odds for profit – since you’re directly responsible for how much money you trade, that means you also have full control over your potential profits. And because you trade directly with other traders, you also get the maximum profit possible with your trades – no transfer or handling fees applicable.
Ease of access – forex trades are usually made by lots – more or fewer groups of currencies – and you can trade a little bit at a time, eventually working your way upwards the more gains you get. Transitioning between big and large lots is easy as long as you find the right broker.
Abundance of currency pairs – the forex market trades in all sorts of currencies, so you can always have a trade running at whatever time zone you want. Major currency pairs will always have people buying and selling them, but they can often change rapidly and carry many risks. Minor or commodity currencies can carry less risk, but they’re subject to different factors that move their rates than major currencies. You can choose to invest in a currency that you already use, or another pair with more value.
No central regulation – you might have heard once or twice about the world’s central banks taking action to prevent the forex market from crashing, but the truth is that these events are rare, leaving the forex market mostly unregulated. This is good for two reasons: the first is that without a centralized overseeing body, the market isn’t subject to change just because the regulatory organization declares a policy change. The second is a distinct lack of fees, meaning your trades are directly made through your broker with other brokers, which help cut down on costs.
Cons of forex trading
The forex market is a straightforward financial career to enter, but it takes years of experience and a little more than intense study to get right. Here are some of the risks you should watch out for:
High risk vs. high reward paradigm – with high profitability comes high risk. Since forex trading is mostly speculative, any trader always has to be comfortable knowing that the money they invest could be gone at any second.
Constant learning – forex traders largely learn the market on their own, even with the help of a broker. If you want to succeed, get ready to settle in for a long haul and take the hits as they come.
Complex market pricing – prices often fluctuate depending on many different circumstances, from geopolitical changes to traders adjusting their market strategies for the day. This means that prices aren’t always fixed and need much consideration from other forex market areas to arrive at a point.
The forex market is one of the most engaging finance sectors that you can ever step foot in, but keep in mind that it requires much work to stay in it, and even more if you want to make meaningful gains.
Start trading with Blueberry Markets for as low as $100 when you open a live account. We offer very low spreads and lightning-fast trade executions, so you can take advantage of winning opportunities.