A common question asked by many people is whether it is better to invest in stocks or take the plunge into forex trading. Obviously neither one is definitely better than the other, but there are pros and cons for both. In this post we’ll be focusing on what makes trading on the forex market potentially a very prosperous venture. We will also list a few considerations you should take when commencing your journey as a forex trader if you’re relatively new to the idea of trading exchange.
Trading forex has many benefits and some of the fundamentals are (read more here):
Whereas stocks could drop drastically along with your money, forex trading allows you to play with multiple variables (different currency), adding flexibility to the practice.
The forex trading system runs 24/5 and allows you full access at anytime, night or day. Add to this the fact that online trading is possible and any forex-related brainwaves you might have in the middle of the night can be put into practice within minutes.
Having to wait 12 hours for the stock exchange to open could mean a serious dent in your investments, especially if any major events have happened over the close.
Slow and Steady
A successful forex trader will not be one who is constantly experiencing conflicting emotions because of trading outcomes. This type a trader is more often than not approaching forex trading in the same way he might a game of black jack or roulette.
Own It
A good forex trader never blames external factors for trading losses they have experienced. The forex exchange market is a naturally fluctuating system. As a trader you are responsible for the input to that system and you need to take responsibility for what the output is.
The Virtue
Trading can be an exciting challenge. No matter the amount of forex you are playing with, it’s important to practice discipline during the process. Regardless of the software out there, forex trading requires patience. The most successful traders observe patience while amateurs tend to be more impulsive and fail to differentiate between higher or lower-probability profits.
Tight Fists
Possibly the most important part of forex trading is the management of your money. In modern times many people have confessed to being impulsive and spending money under the presumption that it would yield roughly a certain amount in the future. It often feels dangerously easy to indulge in risky forex trading over the Internet and with just a few clicks and keystrokes you could be sitting in your lounge having dipped into that pension fund.
This generally isn’t the case and these extreme examples are there to encourage you to tread with caution when starting out as a trader. It’s often best to consult someone at first just to show you the ropes and before you know it you’ll be forex trading like a pro.