Why to trade Forex ? That is the key question I will explain you in this blogpost. There are a few good reasons why you should also consider to trade FOREX. Read this blog post to the end and you will understand my reasoning.
A Few Good Reasons To Trade Forex
During a global financial crisis, the stock market declines, the real estate transactions freeze and the retail sector may suffer losses or even bankruptcy. In contrast, Forex can remain profitable even in the worst of times because currencies are always traded in pairs. When one currency declines, there is always another currency with a rising value, regardless of the broader market conditions.
In short, you are able to make money regardless of whether the market is trending up or down.
I have been following the EUR/USD pair a few years now and never had a clue you could trade that and make money from it. I should have known because there is currency exchange kiosks on every airport that I travel to, and these companies make profits.
Work while lying in a hammock or travel
One of the main advantages of Forex trading is that you can do this from anywhere !! I was searching for a way to make money while travelling. All you need today to trade forex with the software Metatrader 4 or 5, is a smartphone and an internet connection. So far I could only swing trade and/or make my investments outside business hours.
Another reason why we want to trade Forex is the flexible hours. As I travel almost 2 months throughout the year to three continents, I can trade in different timezones from my smartphone. On my last trip to Shanghai, I had free Internet and the software on my smartphone also worked flawless on the plane. I made 15$ in my demo account. Imagine that you can make money while travelling on a plane….
Forex markets trade in a seamless 24-hour session, 5.5 days a week, from Sunday 5:15 P.M. EST until Friday 5:00 P.M. EST.
Start with 100$
There is one more reason why Forex is more and more popular : it has low start up requirements and relatively inexpensive account costs.
- Trading starts with as little as a few hundred dollars, sometimes less.
- Forex brokers typically provide free full-featured trading platforms and data feeds, and the better brokers offer extensive archives of free training materials and market analysis. With online stock brokers, traders typically need to maintain significant minimum balances or minimum average monthly trading volumes to get similar service.
- Brokers typically provide full-featured practice or demo accounts that allow smart beginners to simulate most of the trading experience and practice with play money until they feel ready to risk their capital.
Most Forex brokers charge no fees, commissions, or hidden charges. They earn their money on the difference, called the spread, between the buy and sell price, typically a few ten-thousandths, called pips, of the price. Depending on the lot sizes traded, a typical two-pip spread to open and close a position can cost anywhere from $0.20 to $20. In general transaction costs are very competitive compared to those of online stock brokers.
Personally I decided to subscribe to a FOREX education platform where professional forex traders give webinars and tools to identify profitable trades. That gives me an edge in the market and shortens my learning track. So I am learning from Pros.
Sell at any time
With a daily turnover of more than 5$ trillion, forex is the most liquid financial market. Forex markets always offer the best liquidity. A liquid market is one that has many buyers and sellers. The more buyers and sellers at any given moment, the more likely you are to get a fair market price when you buy or sell. The more liquid a market is, the less likely it is that a few big players can manipulate prices to their advantage. Indeed, unlike in stock markets, even the biggest players will have trouble manipulating the price action in major currency pairs beyond a matter of hours.
Learn from Pros
As you can see on my visual skills set map, I have added two blue boxes under Forex trading. In 2019 we will focus on mastering this skill.
The decision to use a Forex education and tools platform has also allowed me to surround myself with professional traders in Belgium, USA and beyond. Coming Monday I will go one day to London to get a BOOST training for ONE day from a professional US trader. If you are interested to join this training program and/or use those tools and join this forex trading community, let me know by email and I will setup a ZOOM conference call to show you. The decision is afterwards yours. You will be able to follow our results on this blog going forward.
Additionally I see other opportunities going forward but I won’t tell you everything in my first blog post about this topic.
Final Words
What have we done so far ? During past month we have educated ourselves the basics of forex trading. There’s not much difference compared to options trading. We also started to learn the advanced techniques and strategies that professional traders apply. We focus on 1 to 2 strategies only.
We have also setup a demo account with a broker on our smartphone and learned the basics on how to use Metatrader 4. We started with a demo account of 1.000$ as we plan to go live with a real money account when we feel ready for it.
You can also enter trades before going to bed and wake up with profits. After doing my technical analysis I entered one day a trade, set a stop loss and profit target and went to bed. There’s nothing better than waking up with profits the next day… See screenshot where I made a profit on XAUUSD and a loss on another currency pair. That was a WOW moment for me !
Another key learning is the leverage that you can use. Proper risk management rules are required when trading FOREX, but if you master this skill, you can make big profits. The biggest gain in our demo account was a 400$ profit with 1 lot. That was amazing. I realize that a demo account is different but the objective is to become robotic in applying a trading strategy.
Last but not least I learn a lot more fundamentals about the relation between a country and its currency, the correlations between different currency pairs and the impact of central banks decision making. Any news can have a forex impact and some currency pairs are heavily traded each day. Just take a look at the British pound graph during past months. So that’s it ! Another year, another exciting challenge… I am excited and we have put an action plan in place. Dedication, commitment and hard work will get us where we want to be… Time for action !
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Good luck with your personal finance strategy! Thanks for following us on Twitter and Facebook and reading this blog post. As always we end with a quote.
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