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Why You Should Seriously Think About Forex Trading

Why You Should Seriously Think About Forex Trading

The first thing that one should ask before becoming a trader is what market to go for. A lot of things are involved including stocks, energies, options, futures or currencies. Every market has its own appealing features as well as risks, but Forex emerges as one of the winners, owing to a number of striking advantages it offers. Get to know why it would be great to take up Forex trading seriously.

1. High Liquidity

The capability of an asset to be turned into cash rapidly without involving any kind of price discount is called liquidity. The Forex market shows high liquidity which implies that a large sum of money can be moved into and out of foreign currency, without experiencing any large price movement.

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2. All Time Market

The Forex market has spread itself across the globe. Trading occurs on a continual basis since there is more or less one or more markets open worldwide at a given point of time. Trading begins with the opening of the market on Sunday evening in Australia and finishes off with the closing of the market on Friday in New York. To get the best results, your trading time must be adjusted in such a manner that you trade in an active market.

3. Leverage

This refers to the process of trading more money in the market compared to the actual amount present in the trader’s account. In the Forex market, brokers make room for traders to use leverage while trading.

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For instance, if the market allows you to trade at 50:1 leverage, it indicates that for every single buck you have in your account, you can trade 50 bucks. This, in turn, implies that with $1000 worth of capital, a trade of $50,000 can be controlled. Allowing trade with a considerably small amount of capital is one of the most striking benefits of Forex.

4. Potential for Profit against Rising and Falling Prices

In the case of the Forex market, directional trading has no restrictions. So, if you think that the value of a currency pair would be increasing, you can purchase the same, or go long. In a similar manner, once you feel that the value could decrease, you can sell the currency pair, or go short.

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5. Unrestricted Demo Account

Contrary to what several other financial service providers offer, Forex brokers allow you to preview their services. You can even evaluate your trading knowledge with the help of a practice account or demo account. This, in turn, makes it possible to trade paper money as you properly grasp the real market conditions.

The most interesting thing about having a demo account is that there are absolutely no restrictions for this account. Trading can be done here as long as you want to.

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6. Bonuses and Loyalty Programs

Financial institutions other than those involved in Forex trading are in fact quite costly service providers. With them, you get non-negotiable trading conditions and almost no reward as a client. When you work with Forex brokers, there is always a dedicated account manager to provide you with due assistance.

Also, you are treated to lucrative loyalty programs, which almost compensates for the transactions that you indulge in. Then there are bonus offers by some brokers through which you can obtain higher trading capital, as you move forward to achieve higher volumes.

Something that comes with such a wonderful bouquet of advantages cannot be without risks, and this same principle also holds true for Forex. Being the largest global financial market, Forex can experience high volatility. This is a good thing, but can result in losses, when there is also high leverage. So, carefully seek expert advice and you will surely reap the benefits of trading in this market.

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Adnan Manzoor

Data Analyst & Life Coach

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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