Is forex trading profitable? if you have sufficient skill definitively yes. Now online forex trading is not just for those who have large capital.
Although a retail trader also has the chance to profit in this trade, because you can start with small money even 10$.
Where to trade forex online? Now there are lots of forex brokers who provide services to retail traders to use their platforms and make transactions easily.
TenkoFX is a broker that relies on STP accounts allowing you to get the best price with execution speed in just milliseconds.
Straight Through Processing gives satisfaction in transactions without broker intervention..
Advantage of forex trading
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Why is forex becoming one of the increasingly popular businesses nowadays? This is inseparable from the advantages of forex trading, there are many advantages to starting forex trading. But indeed in this business, there are certainly advantages and disadvantages to forex trading.
Therefore, most traders will see the positive side rather than the negative, because forex having potential profit. This will make them more enthusiastic about learning how to trade.
Here some advantage of forex trading in the list.
Trade anytime anywhere
Forex trading is very flexible. as a trader, they can trade online, work at home.
The transaction can also be done through computers, laptops, tablets, and smartphones, therefore traders can also make transactions with applications provided by brokers.
With the internet, forex trading is now very affordable and you can trade anywhere. This is the first advantage of forex trading, where the conditions are only:
- You have hardware such as computers, laptops, tablets, or smartphones.
- Has installed a trading platform application provided by the broker for trading.
- Having an internet network that is quite adequate for conducting online transactions.
The Forex Market is a market whose transactions are carried out on a global scale. Unlike other financial markets such as stocks that only open according to working hours. The forex market is open 24 hours a day, and only Saturday and Sunday the market is closed.
With the opening of trading time 24 hours non-stop, 5 days a week, it means, as a forex trader, you will be able to set your own trading time. If you prefer to work in the morning because you have another main job, it doesn’t matter, you can trade forex at night or vice versa.
You can trade forex during the day when you already have a busy night work. Or if you want to specialize only trading in the most profitable times, then you can choose the best forex trading time and hours.
High liquidity forex pairs
The forex market is a high liquidity forex pairs market, especially in major pairs such as GBP/USD, EUR/USD, USD/CHF, and so on. This market is the largest and most liquid financial market.
The forex market has a very high level of liquidity or fund availability. This liquidity reaches up to an average of US $ 5.3 trillion per day. This data was also released by the Bank for International Settlements (BIS), an institution that houses banks worldwide.
We know that the forex market is the largest market with high liquidity. The level of liquidity is even greater when to compare the stock market in the United States though. The large availability of funds in the forex market also makes it easy for traders to open transaction, every time you open buy at the market will always available to sell.
Whenever you want to sell, there will always there buyers. And vice versa, whenever you want to buy, there will always their seller. In addition, in forex trading, there is no queuing system like in stock trading.
If in stock trading you need to queue or wait several hours to days for you to get a price agreement, then that is not in the forex trading system.
Low barrier to entry markets
Maybe you think to start trading forex requires large funds? In fact, to start trading forex requires less capital than to start trading stocks and futures.
Some brokers offer mini and micro accounts, even with only 10 $ you can start trading forex. And the leverage system allows the broker to lend funds in proportion with the guarantee of funds provided by the trader.
Leverage allows you to open trading positions greater than the amount of money as an initial contract.
This means that leverage can provide greater potential profit. This is indeed an opportunity for retail traders to try their luck in the biggest market in the world.
No commission currency exchange
In forex trading, there are no clearing fees, also no exchange fees, even no government fees, and no brokerage fees.
Most retail forex brokers get profits for their services through something called “spreads“. This spread is the difference between the bid and asks the price.
With the internet, you have the freedom to choose a forex broker with the lowest trading costs or spreads with the most sophisticated trading software facilities as our bridge with the forex market.
Thus, although at the beginning of the emergence of forex belongs to big players, now this business is the cheapest business.
No fixed lot size
In online forex trading, you are free to determine the size of the position, or lot on your transaction. This is different from futures trading, where the defining position size provisions are exchanges, contracts for silver futures are 5000 ounces.
In forex trading, you are free to determine the position size, even with 0.01 lots you can trade on forex.
Two-way profit opportunities
When traders expect prices to go up, they make a buy option, and if they expect prices to go down they will do a sell option.
Thus forex has Two-Way Profit Opportunities, both buy and sell get the opportunity to obtain a profit. You can also use hedging to lock your loss by opening opposite positions from your loss position.
Low transaction costs
Transaction costs in forex are fairly low, ranging from 1 pip to 7 pips, this also depends on your broker’s policy, because each broker of their market maker determines the spread fee for the company’s profit.
You need to contact your broker and read about the trading commission at your broker to see it in more detail.
Nobody can corner the market
In a large forex market, no single entity will be able to control prices on the market for a long period of time. Even though it is a central bank, maybe they can only control prices for just a few hours with big money in their hands.
Free forex trading education
Forex brokers generally provide demo account facilities, and also education for a newbie, like here. With this facility, anyone can learn and practice exactly like real forex trading, but without the risk of loss.
The funds used in the demo account are only virtual money, this facility is also provided free of charge by brokers. If you lose in a demo account, you don’t need to paying money, but even if you make a profit, you can’t withdraw.
This demo account is actually for those novice forex traders to practice trading skills before actually using real money. Despite the fact that many traders use this facility for backtesting trading robots or trading strategies.
The disadvantage of forex trading
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Forex is a type of investment that has the highest level of risk. Many sources state that forex is riskier than other assets, such as bonds, mutual funds, and stocks, the potential for higher forex profits in the short term, but also has the highest risk.
According to the results of several studies conducted by the French AMF forex regulator, 90% of traders end in loss. This means that only 1 from 10 people succeed in forex trading.
High price volatility continues to move, which is generally used by traders to make profits, but on the other hand, it is like a double-edged sword. Besides being able to provide profit to traders, it also has the potential to cause losses to traders.
This is called the risk of volatility.
Leverage trading risk
Leverage, on the one hand, gives benefits that can increase profits, but on the other hand, also accelerates losses, it’s like one sword has two sides.
When a trader does not use margins wisely, this will narrow the margin level and will make him weak in holding changes in prices, so it will be faster to get a margin call.
Forex is a type of high-risk investment when you start trading without knowing the basics of trading and investing in large amounts, this will not guarantee you will not lose.
Maybe if the money you deposit in a small amount is not a problem, but what happens if you deposit a large amount, this will make you psychologically depressed.
So be careful in investing in forex, don’t ignore the golden rules of investing money in high risk, only spent money that is afforded to lose.
Forex Brokers Risk
Brokers are companies that provide services to traders with profit goals, so you must be vigilant in choosing a forex broker, not all brokers are safe and provide the best service.
Sometimes you might find a broker with a large number of bonus offers, before using it, you should cross-check, because behind it is usually hidden misleading rules, in the sense that they make rules that are difficult for traders to achieve.
You should choose a regulated broker and a positive trader review.
Forex trading is a growing business at the moment, by storing various kinds of advantages and disadvantages.
When you start, learn first the ins and outs of forex trading with preliminary preparation.
Because after all forex is a type of high-risk business, a person can lose money only in a short time even in a matter of hours or days.
You can use a demo account to train your trading skills to find a trading style that is suitable and profitable for you.
Are you ready to start trading?