I came across this question on Quora. There were different variations of this question, but the general idea was clear.
When I read this, I reflected on my own trading journey, which started with options and futures in the late 90s and progressed to where I am now.
As a trader (and instructor), there are very distinct advantages of trading Forex which have always drawn me to that particular market. Let’s discuss them.
Leverage is Where It’s At
Brokers offer leverage of varying degrees – up to 1000:1 and even higher, which cannot be had in other markets. We would never advise trading at such high levels of risk and advocate trading at 20:1 leverage, which gives you potential for amazing profits and keeps you “safe” as well in case things don’t go your way.
“1 For 1”
Stock trading is a “1 for 1” endeavor – meaning that you get one dollar of stock for…well, one dollar. There are some instances where you may get 2:1, but those are exceptions. If you don’t have a large bankroll, then it can be quite the uphill battle to make any headway. There are different markets favored by other folks, but this isn’t the place for that conversation, so we’re going to stick with the initial question.
There is an article that discusses “trading on margin” for stocks if you’re interested in reading about it; Trading Stocks With Leverage
Market Trading Times
Where you live, and your working hours, may dictate when you have time to trade. Considering that the FOREX market opens Sunday evening and remains open until Friday afternoon, 24-hours a day, providing some window of opportunity for traders all over the world to make time for themselves. Furthermore, our way of trading (The No Nonsense Forex way), our trading window is specific (for a reason) and to the point, so creating that trading opportunity should be a focused goal, instead of trying to find “any time” to trade which may not benefit you in the long run.
Minimum Amount to Trade
May brokers require $100 or less to open a live account. This means you don’t have to have a lot of cash to begin your trading career. Granted, if you can only afford $100, save your money until you are genuinely ready to commit discretionary funds to trade.
And please…never, ever trade with money that pays your rent, food, utilities and basic needs. Lose that, and the battle is already lost.
Trade Size – How Large Can You Go?
Most brokers offer three “sizes” of trade positions;
100,000 units – FULL LOT
10,000 units – MINI LOT
1,000 units – MICRO LOT
Some brokers even offer a position size called NANO LOT (100 units) which means at the very smallest position size, each whole pip of movement equals $.01. This means everybody can eventually afford to live trade, experiencing the thrill of profit, the challenge of loss, while maintaining capital to keep on trading.
Paper Trading (also known as Demo Trading)
Virtually every MT4 broker offers unlimited demo trading. If they don’t…and pressure you into opening a live account, you probably need to find another broker. By having the opportunity to trade a demo account, you have the ability to test indicators, systems (expert advisors), and strategies before committing to a real money account. We happen to have exceptional broker information on the site HERE.
Tools of the Trade
There are so many tools specifically developed for the Forex market…and a lot more from other (and older) markets which can be used in a dizzying array of different arrangements. Searching, testing and trying the thousands of available tools ensures that somewhere out there, you WILL find something which will help you become a better (and hopefully profitable) trader.
Love One Another
The FOREX community. Considering that this is a worldwide market, so many individuals are continuously contributing to help others. Need to find an indicator? Just search for it. Need some explanation of how something works? Just search for it. Need to take a class (which we offer). Just search for it…
You’re an International Player
Another benefit of trading Forex is the inherent exposure to global finances. Foreign news reports, cross currencies and world events create an environment where you get to be a part of it.
The benefits listed above are the larger advantages; however, we’re pretty sure there are many more that you may know of which we haven’t even thought of. Never give up. Study hard. Paper (demo) trade first. You can do this.
More to Come
There’s a lot more to come. If you haven’t signed up on our contacts page or subscribed to the YouTube channel, please consider doing so to receive notifications as we continue to publish helpful, relevant, and informative Forex related material to support your quest to becoming a better trader.
To learn more about trading Forex, consider taking our advanced course. Click HERE for more information.
You can do this.
Our only goal is to make you a better trader. Be sure to sign up on our contact list for the latest announcements.
BTW – Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.