Forex currency exchange trading is one of the fastest growing trade markets in the world. It is also the biggest with an estimated 1.8 trillion dollars being exchanged every single day.With these stats to it's name it should come as no surprise that one of the major reasons for this exponential growth is the fact that Forex trading offers incredible earning potential.
This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make.
Incredible Forex Leverage Ratios
So why does Forex trading offer such incredible earning potential? Well firstly the currency exchange market operates through brokers who offer some significant leverage ratios to their traders.
For example, you decide to purchase 10,000 US Dollars against Japanese Yen at 125.00. Next day you sell 10,000 US dollars and buy Yen at 126.00 making a profit of approximately $79. To fund this position you need a deposit of $100 not $10,000 since the rest of the amount is leveraged to you by your forex broker.
If you were to try and trade without any form of leverage you would make very minimal profits and it would not be worth your time trading.
This is the beauty of Forex trading, any individual trader, no matter what their starting capital, can experience the thrill ride of trading large amounts of currency and making big profits without depositing thousands of dollars.
Massive Earning Potential
Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth - where the sun is shining the Forex is trading! This means you can be making profit 24 hours a day on Forex, particularly if you make use of an automated trading system.
The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value.
Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade.
There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker - whatever you earn you can keep!
Stop-Loss Functions for Safer Currency Trading
The stop-loss functions of Forex trading platforms will also help you to make huge profits trading currencies. These work by you pre-setting an entry and exit point you are happy to complete a trade at.
For example, you know the figure you want to make from a trade and you also know the most you are willing to lose if things go wrong, so you set this up when you start your trade.
If the value of your trade reaches either of these upper and lower limits you trade will automatically execute. This puts a limit on your losses and ensures that you never lose more than you intend but you always profit as much as you envisage if things go in your favor.
All of these factors and more contribute to making online Forex trading one of the most profitable trading opportunities in the world. Those that get their strategy right are well known to be making millions every year from trading Forex.
If you are willing to put in the time to properly educate yourself and do not try to run before you can walk then you have a fantastic chance at making sums of money you never dreamed possible simply by trading currencies online.
Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth - where the sun is shining the Forex is trading! This means you can be making profit 24 hours a day on Forex, particularly if you make use of an automated trading system.
The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value.
Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade.
There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker - whatever you earn you can keep!
Stop-Loss Functions for Safer Currency Trading
The stop-loss functions of Forex trading platforms will also help you to make huge profits trading currencies. These work by you pre-setting an entry and exit point you are happy to complete a trade at.
For example, you know the figure you want to make from a trade and you also know the most you are willing to lose if things go wrong, so you set this up when you start your trade.
If the value of your trade reaches either of these upper and lower limits you trade will automatically execute. This puts a limit on your losses and ensures that you never lose more than you intend but you always profit as much as you envisage if things go in your favor.
All of these factors and more contribute to making online Forex trading one of the most profitable trading opportunities in the world. Those that get their strategy right are well known to be making millions every year from trading Forex.
If you are willing to put in the time to properly educate yourself and do not try to run before you can walk then you have a fantastic chance at making sums of money you never dreamed possible simply by trading currencies online.