There are a couple of questions everybody has when it comes to forex, but probably the most interesting and most often asked is if it is indeed profitable. Therefore, let’s take a few moments and discuss this essential question, shall we?
Forex trading, as you probably know, means converting one currency to another. Everything is done on the foreign exchange market, where both institutions and investors trade currencies. And this, as a matter of fact, is the largest financial market in the world, managing to reach over $6.6 trillion per day, since 2019.
What should I start with?
Over the past decade, forex trading has grown impressively. There are currently three different types of forex markets: the spot market, the forwards market, and, finally, the futures market. The spot market is the one that stands out, as this is where the currencies are traded for immediate delivery.
On the other hand, the futures market and the forwards market don’t trade actual currencies, using contracts. That’s why we can say that trading in the forex market can become profitable quicker!
But how can I earn a profit?
It’s not that difficult, to be honest, as long as your disciplined.
Your success depends, in the first place, on how much you understand, but also your trading strategy and the risks you are willing to take in the first place. Generally speaking, both profits and losses can be unlimited in the forex market, as trading is performed based on the leverage, usually huge, provided by brokers, able to magnify gains and losses.
Sure, there are also some risks you should take into account before putting your money in forex, like platform malfunctions, sudden bursts of volatility, and counterparty risks.
Therefore, if you choose the right broker, forex trading is 100% safe. And by ‘the right broker’ we mean registered with the SEC and without any features that raise even the slightest concerns. As for the profitability part, you can earn some significant amounts as long as you follow the rules and dedicate some time to individual studying!