Forex trading is becoming a common side hustle, especially these days when everybody is looking for opportunities to generate additional incomes to make ends meet. The flexibility of trading times, the amount of capital required to get started, and the cost involved making forex trading a venture to consider. We expect to see more people get into this industry which was previously reserved for big investment organizations and banks. Of course, a few people who have tested the fruits of trading will not hesitate to give a positive response if you ask them whether forex trading worth the risk.
Indeed, investing in forex is worth it. It allows one to trade in the world’s most liquid market. Returns from forex market are good and will help you to supplement your income if you are a part-time trader. Also, you can also earn a living from the market if you choose to trade on a full-time basis.
How Much Profitable Forex is in 2021
When you ask people whether it is worth trading forex, you will get either a yes or no answer depending on who is answering the question. For a person who lost life savings trading forex, the answer will be a big ‘’No!’’ But when you ask a multilateral organization or a successful trader, they will affirm strongly that trading forex is the best decision they ever made in their lives. In this article, we delve in the reasons why you should invest in forex trading.
But before we delve into why one should consider investing in forex, it is important to emphasize that when you plan to get into forex trading, you must have a clear motive of why you are getting into the business. Besides, you must be prepared to absorb the shocks associated with trading forex. Also, it is vital to note that trading forex is not a get-rich scheme. It is neither a good place for greedy traders nor for anyone who thinks that overtrading is a chance to make quick money. Furthermore, we want to emphasize that forex trading is not gambling, and so if you have been lucky to win big in some gambles, the luck may not be of use in forex trading. Lastly, avoid trading with emotions if you want to succeed as a forex trader.
What do you need to do to succeed in trading forex
For anyone who is disciplined, investing resources in forex education could help them rip the benefits of trading forex. It takes time and consistent education to succeed in trading forex. Therefore, you will only become a successful forex trader if you can invest your time and money in forex education.
If you are getting into the market for the first time, you may be lucky if you do not lose your first deposit. People who started by making profits are countable. I guess they are among the few lucky people you are likely to encounter in the forex trading arena. So it would help if you spared more time for educational activities. Note that it could take up to a year before you start enjoying the profits. Therefore, starting it off with a smaller deposit you are prepared to lose could give insight into lessons that forex tutors did not take you through. If you are a beginner, want to get into forex trading, you may check out our content on the Dummies Guide to Forex Trading
8 Reasons Why Forex Trading Is Worth Investing In
a). You can make lots of money
Of all the side hustles, forex trading is the easiest way to make some extra income. Besides, you can choose flexible trading hours depending on your schedule. Also, given that the market works for 24 hours a day, it is flexible and allows you to choose the hours you think are convenient to you. How much you could make in a day depends on many factors, including the experience and the capital you invest. You can make lots of money, but as we said, it is not a market for greedy traders. If you become too greedy, you can lose everything you will have made in a day. Even though you can trade any time, you must have a schedule of when and what time to trade. So it is not easy to say how much money you can make trading forex in a day.It depends on the timing, the capital invested, and, of course, the currencies you choose to pair.
b). The cost of trading is low
One of the reasons, why it is worth investing in forex, is that the cost of investment is low. You can start trading forex with as little as $100. Besides, the commissions you pay brokers are negligible. Also, unlike other businesses, the overhead cost of trading forex is almost zero. Therefore the low overhead cost makesforex trading profitable.With low overhead costs, most of the money traders make will thus constitute their profit.
c). Allows you to choose your trading style
Forex trading isflexibility and gives the trader a wide range of space to operate in. The market operates for 24 hours a day for five days. It means that you can trade at your convenience and make as much money as possible. This is an advantage to short term traders; most of who take trading positions for a few minutes or hours. It also allows them to trade the currency when little activities are expected. At such times, you will expect a stable price range. Traders can cash on high volumes to increase their profits, given the small profit margins due to fewer developments that could trigger price movements. That aside, forex traders can take long term positions that will last for days or even weeks. At this point, it is clear that forex trading is convenient, flexible and worth investing in?
d). Allows a trader to participate in a high liquidity market
Forex the number of participants in the forex market is high. They provide the funds that make it highly liquid. Traders are free to increase their volumes of trades without impacting the price. As such, no single trader can manipulate the market. It results in similar price patterns you can easily observe throughout the trading session.
e). Decentralized Market.
Forex trading is an over-the-counter business that operates in almost all countries of the world. But there is no single regulator or anyone who can influence the prices in the market. Of course, a country’s central bank may occasionally interfere with its currency under extreme conditions. However, such interferences occur once in a while and are always perceived. So they do not lead to huge price changes that could destabilize the market and result in losses. Therefore, decentralization and deregulation help to reduce the influence a trader or a country could have on the market.
f). A trader can take advantage of high volatility.
At this point, we need to mention that forex trading is profitable. There are times when the investment in forex market could be rewarding. For instance, major currencies could at some point go through extreme price swings. So if you place your trades wisely during such high volatility times, you can make enormous profits. For your information, you have 28 currencies you can pair. Out of the 28, there are eight major currencies you can choose to pair. To make profits from the currencies, you will need to pair them based on economic development, validity patterns, and convenient timing.
g). It is easier to get started.
I think we are now in a good position to say that forex tradingis a good way to make money. For starters, we must acknowledge that it is easier to get started in forex trading than any other business. There are a couple of indicators that will help one get started trading forex. Also, there are plenty of tools that will enable you create enormous trading choices. Therefore as a new trader, you will need to choose appropriate tools to make money on the forex market.
h). Trading is faster
Unlike in other ventures where you can buy merchandise, but you have no idea who you will sell to, or when the buyer will come, the forex market is highly liquid. Therefore, buying and selling of currencies can be done in real-time. Notice that currencies are always on demand, so you will always find a buyer once you place a selling order. Also, it is easier to sell a depreciating currency because when it starts appreciating, the holder is likely to make a profit. Thus, it is easier for buyers to find sellers and vice versa in the forex market.
Want to learn which pairs are best for trading, Check out our content on Best Currency Pairs to Trade for Beginners
Most Common Questions People Usually Asked Before Getting Into Forex Trading
(a) Is forex trading worth the risk?
If you can invest in forex education and exercise patience, you can join the significant number of traders earning a living from forex. The industry offers financial freedom and will allow you to trade only when you are free. Also, it does not require huge sums of money to get started.
(b) How much do forex traders make a day?
The amount of money a forex trader can make in a day depends on many factors. Firstly, the amount of capital invested and the volatility of the market matter. Investing more capital allows you to place more trades. It increases the amount of money a trader can make per day.
(c) Can you make your living out of forex?
Absolutely! Many traders earn a living from forex. But it requires experience and some hard work before you can start making profits consistently. You must also learn to identify profitable trades and limit your losses.
(d) Is it viable to become a forex trader?
Yes, becoming a forex trader is viable only if you can identify profitable trades and learn how to mitigate losses. With time, you will be able to get a slice of the more than 5 trillion dollars traded every day. But you must invest in learning and toil before you start making regular profits.
(e) Is Forex Better than Binary option?
It is a relative question. You need to consider a couple of things to go to a conclusion. To make a deep dive into the topic, you may check out the content on
Forex Vs Binary Option: Which one is Better for Beginners
If you have read this post up to here, you can confidently say that investing in forex is something worth considering. Indeed a career in forex trading is lucrative, highly engaging, and profitable. However, there is a learning curve to be pursued and financial risks to take. But with a good strategy and prudent financial management, you can, certainly, earn a living from forex. Now you have already learned about the potentiality of fx trading, If you want to know more about forex trading, you may have a look at our content on Top Forex Trading Books for Beginners.