Due to high liquidity, 24/7 schedule and easy availability, trading on the Forex market has become a popular career, especially for people with financial experience. Being your own boss with the convenience of making money using a laptop / cell phone, when it’s convenient for you, is sufficient motivation for both young graduates and experienced professionals to recognize forex trading as a career. Is Forex trading good?
What is the Forex market in 2020?
Forex, also known as the currency market (or FX), is the largest and most liquid market in the world. The retail part came with the development of the Internet. This enabled retail clients to trade on the Forex market online through various trading platforms. Forex opened its doors to retail clients in the late 1990s. At that time, the first online retail brokers started operating.
Forex, as a market, has been operating for decades, but only accepted institutional clients. Nowadays, trillions of US dollars are traded on the Forex market every day, with retail clients accounting for almost 5% of their total volume, or about $ 250 billion in daily turnover.
Trading risk management on the Forex market
Every successful Forex trader manages its risk; this is one, if not the most, key element of continuous profitability.
To get started, you need to keep the risk on every transaction very small, and typical is 1% or less. 3) This means that if you have a $ 3,000 account, you shouldn’t lose more than $ 30 on one transaction. This may seem small, but losses add up, and even a good day trading strategy will bring losses. Risk is managed by means of a stop-loss order, which will be discussed in the scenario sections below.
Advantages of a career in the Forex market
There are several advantages that a career offers as an investor in the Forex market, also known as an investor in the currency market. They include:
- Low costs
- Fits various shopping styles
- High liquidity
- No central exchange or regulator
- Trader’s friend changeability
- Variety of pairs to exchange
- Low capital requirements
- Easy entry
Disadvantages of a career in the Forex market
- Lack of transparency
- Complex price determination process
- High risk, high leverage
- High volatility