When it comes to forex market, there is no other trading market that is popular and dynamic than the foreign currency market. This is because the said market is operational 24 hours and it has the highest liquidity in the world. When all the global equity market is combined, the forex market has a liquidity of $1.5 Trillion on a daily basis. To participate in forex trading, you will not be limited to time like stock trading (market) this is because the forex market is a 24 hour platform activity and this means you can trade any time you wish.
Below are day trading sessions that happens around the world.
(a) Trading starts in:
- New Zealand
- Hong Kong
(b) 3 Hours Later:
- Other Middle East Countries
(c) A few hours later it starts in:
(d) 5 Hours trading starts in:
- New York
(e) Then trading opens last in London
With the above day trading sessions you will have ample time to trade whenever you want. The second benefit of forex market is that you can leverage your foreign currency trading business. Most potential traders don’t have a clear understanding of the term leverage.
Let me give a detailed example on how you can leverage your trading business by trading different foreign currencies.
If your investment capital is $1000, and you decide to trade on a margin of 1:60, this means you can control an investment of $60,000. From my own experience you should not trade or use a margin of 1:30 until you start to get profits from your start-up capital. 1:30 margin basically means your $1000 start-up capital can manage an investment of $30,000. Let’s see how you can make profit with forex trading.
For example: when you trade EUR/USD by using swing trading strategy your profits will be high and high and highly secured. Let’s assume that USD will depreciate against the EURO and the current exchange rate is 1.408 and your initial investment capital is $1000 and you are using a margin of 1.30, this means you will be exchanging at $30,000. On our above assumption the current exchange rate is 1.408 the amount of profit you will make will be $30,000/1.408 = $21306.81 Euros.
Most traders fail to do this and when they lose they run losses and wait for them to turn around and this leads to a wipeout of equity. In addition, when there strategy is not doing well, they override their trading signals or chop and change systems and again they lose – so what is the correct mindset for success?
You need to become disciplined in the application of your plan and stick with your system, keep losses small and be able to run profits. Is that really the secret of Forex trading success? You might be asking and yes it is and its proved by the fact we outlined earlier.
Since your investment was $1000 then your trading income has increased by almost 20% in your trading account. When you consider investing in forex with the help of a profitable forex trading system, then you will be able to achieve your income goals as well as making huge profits.