If you have an entrepreneurial spirit and want to start trading, you can begin with a Forex trading for dummies guide. But before you delve into the basics of currency trading, let’s start off with why you should consider it in the first place. Below are the top reasons why entrepreneurs should try Forex trading:
1. Most brokers offer unlimited demo accounts.
Most Forex brokers allow you to preview their trading platforms and services. You can test out your trading knowledge and skills with a practice account. These practice accounts, more commonly known as demo accounts, allow you to trade paper money with real-time market conditions.
If you have a strategy in place, for example, you can practice it and test it in demo accounts without having to use real money. In this way, you can gauge if the strategy really works or not. The great thing about demo accounts is you can trade with it as long as you want to. No restrictions are placed on trading demo accounts as well.
2. Forex trading offers a high degree of accessibility.
One of the significant benefits of Forex trading is your ability to start with a relatively smaller amount of capital. Trading stocks, for instance, requires a higher amount of capital at a minimum of USD 1,000. However, with Forex, you can start with as little as USD 100 or USD 200 and work your way up. For those who are willing to start trading in live accounts with real money (after practicing on demo accounts), this can be a huge benefit. With Forex trading, you can have another source of income without putting in a lot of capital.
In addition, Forex takes place across a lot of exchanges globally. Thus, traders can place trades 24 hours a day from Mondays to Fridays. Therefore, you can work on your full-time business in the morning and trade during times convenient for you. Another benefit of Forex trading is that you can do it within the comfort of your own home. You don’t need a piece of high-quality technological equipment to trade. You can do so with a simple laptop and an extra monitor if you prefer.
3. Forex trading offers leverage.
With trading, the higher your capital, the larger the position sizes you can make. Forex markets offer a lot of trading leverage. Thus, even small amounts of capital can help you achieve a lot. With a 500:1 leverage, for instance, can enable a trader to open a position that is 500 times larger than their fund.
This allows you to produce a substantial amount of gain (or loss) without having to put in a large amount of capital. Some brokers allow leverage of up to 100:1 or even 500:1. With the former leverage, a dollar amounts to about $100 during trading. Thus, with a relatively smaller capital, you can earn (or lose) a large amount of money.
4. Forex trading is an epitome of technological progress.
Forex is a very popular financial market that has excellent technological innovation. There are a variety of software and platforms you can use to trade the Forex markets. These software are being improved every single year and offers a lot of features to traders.
Third-party software providers even offer multiple trading extensions that can be useful to both beginning and advanced traders. Most platforms are easy to understand and provide a useful interface, allowing you to trade with minimum system requirements.
5. Forex allows you to place short trades easily.
Going short on a trade refers to selling a financial instrument, hoping to gain a profit from its price going down. In stocks and other financial markets, it can be challenging to place short trades as there are requirements in place.
However, in Forex, selling currencies is very easy. Aside from buying low and selling high, you can also sell high and buy low. Thus, the FX markets allow you to profit from prices going up and down. This is relatively more complicated in futures and stock markets. With Forex, you can short sell with just a simple click.
6. Most brokers offer attractive loyalty programs.
Forex brokers usually give you a dedicated account manager to help you with your needs and questions. They even offer you excellent loyalty programs, allowing you to earn from transactions you make. You can also get a second source of income from transactions made by the people you referred to the Forex trading broker.
Wrapping It All Up
It is baffling to know that an American have on average $132,529 worth of debt. That’s why Forex trading can be a way to make extra money, especially for those who want multiple sources of income to pay off their debts.
While you might dive into Forex right now, it is advised that you get the help of a Forex trading mentor to shorten your learning curve. With trading comes both gains and losses, thus making it necessary for you to implement proper trading strategies along with risk management to get ahead of the game.