The Forex Market: What’s All The Fuss About?
It would be no exaggeration to claim that the forex market has really taken the world by storm in recent years, and not just the world of economics and finance at that! But with everyone from first-time traders to financial professionals trying their hand on the globe’s most liquid market, what exactly is all the fuss about?
Well today, the forex experts over at Learn to Trade are explaining exactly that, breaking down the fundamental appeal of currency trading to explain why more and more people are considering opening their first position on the forex market.
What is forex trading?
So first thing’s first, what actually is forex trading? Well, in its simplest terms, forex (or foreign exchange) trading concerns the buying and subsequent selling of international currencies, with traders profiting or making loss from the differences in exchange rates from the moment of purchase to the moment of sale. As a result, currencies are traded in currency pairs, with the purchasing of one unit equating to the simultaneous sale of another.
But why is it so popular?
From the above definition alone, you’d be forgiven for still wondering exactly why the forex market is the world’s most popular trading market, with a humongous $5.3 trillion traded each and every day. While there are a number of factors that contribute to this large-scale activity, there are some fundamental characteristics of the forex market that boast universal appeal:
Quick and easy accessibility
As an internationally connected digital trading platform, accessing the forex market is unbelievably simple. In fact, you can trade from anywhere at anytime, whether that be from the comfort of your own sofa or a professional trading suite. As such, the market naturally appeals to everyone from the veteran trader to the everyday Joe.
What’s more, since the forex market has to accommodate all the world’s international time zones, the market is open 24 hours, 5 days a week. This means the market boasts an unrivalled convenience, with participants able to open and close positions at all hours of the day and night throughout the working week. This makes forex especially appealing to part-time traders looking to supplement their traditional income, as it means they’re able to work around their pre-existing schedule.
There’s plenty of ways to learn the market
At first glance, the forex market can understandably be quite intimidating. From technical charts, graphs and figures to the sums of money be traded at any given time, for inexperienced novices not in the know, understanding how or where to get started can often be enough to put you off from the get-go.
On the contrary, however, there’s a wealth of resources available to help you understand all the fundamentals of the forex market. Whether its expert-led workshops and seminars, handy online ebooks and videos or easy-to-use mobile apps, there’s something to aid every type of learner – meaning obtaining the required basic knowledge to begin trading is nice and simple.
There’s potential for profit
Of course, people ultimately trade forex because of the potential for profit. Whether you’re trading large quantities of lots as your full-time career or smaller pips to act as a bit of extra income, the versatility of forex trading makes it appealing to the financial desires of a whole host of different people.
It should go without saying that the possibility of big wins brings with it the possibility of big losses, however, so it’s always our recommendation to manage your expectations when chasing profit. On similar lines, weighing up the pros and cons is always a good idea before ever opening a position on the forex market.
While the potential for short-term financial gain from trading a convenient financial market may well be very appealing to you, it’s important to also understand the volatility of the forex market. With high volatility comes quick shifts in valuation, meaning money can be won and lost in the blink of an eye. With this in mind, if you decide the forex market is for you, be sure to always practice risk-reward analysis and never stake more capital than you can comfortably afford. When safely trading the forex market like this, you’ll quickly understand why it’s so increasingly popular across the globe!
Author bio:
John James is a content writer for Learn To Trade, the foreign exchange education and learning specialists – offering a range of training courses to help people understand the currency trading market, as well as its opportunities and risks.
