Forex trading is often thought of as a gamble, as many potential investors are afraid that becoming a trader will lead to nothing but wasted time and money. While we’d agree that trading isn’t guaranteed to make you rich, there are actually several clear benefits to becoming a forex trader! Allow us to get straight to the point…
#1: Working on Your Own Clock
Perhaps one of forex trading’s biggest advantages is its flexibility. You can choose to be a day trader that religiously begins at the same time every day if you’d prefer, or you can choose to trade whenever because the market never sleeps. This is also something that can be more of a hobby in your free time that helps you make money, or it can become your full-time job. The great thing about being a full-time day trader is that you no longer have to worry about sick days, vacation time, being late to work, and other problems that affect people working regular jobs. It’s true that you might miss out on some opportunities if you don’t trade enough, but the beauty is that your work schedule is entirely up to you. If you want to take a sudden vacation, you can do that. If you need the day off for some reason, there’s no reason to stress. Finding a regular job that has this much flexibility is nearly impossible.
#2: No More Boss!
This one only applies to those that actually quit their jobs to become a full-time forex trader. Let’s be honest – most people just don’t like their boss. In a regular workplace, you have no choice but to allow your supervisor to bark orders at you and watch your every move if they’d like to, or else you’ll find yourself jobless in a hurry. Forex traders don’t have to worry about the pressures of having a boss to impress, because they are their own boss. They decide when to work, what time to work, what to wear, when and how long their breaks can be, and everything in between. At the end of the day, you get to decide if your performance was up to your own expectations, nobody else’s.
#3: Everyone Can Do It
Trading forex isn’t something that is reserved for people who are already rich or born geniuses. The only things you need are a computer or other devices like a phone or tablet, an internet account, and an account with a broker. Experience isn’t even required to open a trading account; you only need to be at least 18 years old with a starting deposit that can be as low as $5. Sure, some intelligence will definitely help you to be more successful, but the good news is that the internet is filled with free resources that can help anyone learn to trade. If you want to become a trader, everything you need is practically at your fingertips. Think about how hard it would be to become a doctor, lawyer, astronaut – if you’re good at trading forex, then you can skip some of the stepping stones like getting a college education and years of required work experience and get straight to making money.
#4: The Size of the Market
More than $4 trillion dollars are exchanged in the foreign market every single day, providing forex traders with plenty of opportunity for profitability. Across the world, traders are buying and selling currency pairs and other assets day and night, so you don’t have to worry about a lull in activity. Plus, knowing that many people have invested in forex trading is reassuring, as this can tell you that there is money to be made by trading. High liquidity also providers traders with more opportunities to buy and sell.
#5: Transaction Costs are Low
Transaction costs are low…as long as you’re using a good broker. It doesn’t cost much to enter the market and most brokers will charge you low prices for trading. Oftentimes, these costs are built into the spread, which is the difference between the bid and ask price. There may be some other costs to look out for, like commission fees that would be charged when placing a trade. Still, most brokers will allow you to open an account with a small deposit and provide good conditions and low fees.
One of the major advantages that set forex trading apart is the ability to use leverage. This is basically borrowed capital from your broker that allows you to make trades worth more than what you have available in your account. Leverage is expressed as a ratio that can range from levels like 1:5, 1:30, 1:100, 1:500, up to whatever leverage cap is offered by your broker. Do know that using leverage can be dangerous, and we wouldn’t recommend using a high option when you’re just getting started. Still, leverage will allow you to make larger trades, which can be a big plus when you don’t have a lot of funds to start with.
#7: Innovative Technology
Forex trading is at the center of many recent technological advances that improve the process and make trading more convenient. Mobile apps, platform updates, trading robots, and technical indicators are some of the best examples of ways that technology is improving for forex traders specifically. Humans are always drawn to convenience, so the constantly developing updates and upgrades are an undeniable advantage that will continue to make the lives of traders across the world easier.
#8: Free Stuff!
We’ve all heard the phrase “nothing in life is free”, but forex trading has proven that this phrase isn’t always true. Brokers are willing to provide free educational resources in order to build better, well-educated traders that will hopefully sign up for their services later down the road. You can also access free demo accounts that allow you to trade with pretend money. Then there are actually ways to earn cash. For example, a broker might offer a 50% deposit bonus, meaning that the broker would give you $50 in your trading account on top of a $100 deposit. Another example would be a demo contest, where traders can earn real prizes just from trading on a simulation account with no investment. Do know that there are rules that make sure you can’t just claim this free money and withdraw it – you actually have to use it for trading, and you can withdraw profits if you make them. However, anyone that is serious about trading should feel ecstatic about receiving free money in their trading account.