Forex is the largest market dealing in real time exchange. It is popular on account of its huge volume, high liquidity, more numbers of buyers and sellers. Some of it advantages and disadvantages are as follows-
ADVANTAGES
Profitability- Through this, investors can earn great profits by buying one currency and selling in the real time. In Forex Market, Investors can make profits in rising as well as in falling prices.
24 hrs- Forex gives the facility of 24 hrs to investors to trade at any time and at any day, convenient to them.
Leverage- an investor can start trading with a less amount of money. This creates a huge profit potential.
Liquidity- It involves trillions of money that has created liquidity in the market. High liquidity leads to lower spread, resulting in high profits for investors
DISADVANTAGES
Volatility- Forex trading is based on foreign currencies which are subject to great level of volatility that may either give profits or losses to investors.
Proper knowledge- Forex trading would be beneficial only if investor has proper knowledge, otherwise he would land up incurring huge losses.
Forex is an open market and it has many advantages making it open to everyone who wish to trade. As easy as it seems one need to work hard in order to achieve success. It is risky and as such it is always easy to quickly lose money.
It is right that forex is open market for everyone who want to take part into the business so it’s possible for all people to trade but in reality, it’s not easy to trade well in forex market. Many people who lost many dollars in trading too when they didn’t have enough knowledge and experience how to trade well and traders need to have good preparation in money management to prevent big loss which can happen in single transaction when you made mistake in analysis. So, forex is not easy quickly to lose money when you have proper trading plan.
For me as retail trader and poor in capital , the leverage is advantage of forex trading . i can trade just in low amount of profit even just smaller than $50, despite there are disadvantages from it , but i need leverage for increase the margin in my balance
We many time discuss about advantages of forex now I share some disadvantages
It is highly risky business
Market is not certain where we get sure profits.
Need a lot of time to understand and do profitable trading. Mostly traders loose money here .
Low capital not gives good return to traders.
It is true that there are many advantages of trading in the Forex markets and we come to know about them when we start trading and earning a good income from this business
Every business has its risks.
Forex is not worse and not better than the others.
To open a restaurant is risky - you may will not have visitors, or not enough visitors or so many, that your competitor will burn it:D
To open a shoe shop is risky - whimsical women might not like those shoes what you sell, or you will accidentally will find a huge shopping center just round the corner…
Whatever you choose - is risky. Just don’t hesitate to take all the risks and a profit will not wait to come to you;)
In my opinion it is business like any other. Big advantage against standard business is you can not talk with customers, with other people, you can not solve a lot of other problems.It is very easy for decesion making (50:50) but it is difficult to psychology.
In my opinion people are set up this way. Work good and you make money, but in the markets you can do everything right and you can loose also. And you can loosing for a long time (i mean bad period for system). And this is the biggest problem for a lot of people. It is in a nature of people… And after some series of loosing trades they start to ask themself. Is this system good?..hmm probably not, I am trying some different strategy and they are in big trouble.
It is really a big psychology game and you can find a lot of system out there. But if you do not have good psychology for the system you can not make money in long term with any working strategy. So these are disadvantages in my view.
It’s back to the trader himself, you could learn many things from your trading no matter it is profit or loss condition. That’s why, traders should prepare trading journal to help him in making evaluation about transaction which has happened. It is right that you will need time to become expert traders who can gain consistent profit, I think it’s happening in every business, you will need time to become expert in certain business.
I can agree with that statement. I myself have a hard time sticking with journals that’s one thing I wish I could have changed looking back on everything. I wish I had more trading knowledge but then again is there every really enough? In a market such as Forex everything is always changing and no two days are alike. You always have to learn and adapt.
It is good to get a lot of knowledge about trading but knowledge will be useless if you never tried to implement what you’ve read and learned theoritically into real trading. Traders need to trader personally in order to get experience and you can understand what you have read and learned in theory easier than you only read it without doing it. It is true that traders need to keep on learning and develop theirself.
Learning is a never ending process in our life time and same is applicable for the forex trading business as well. Thus, traders should always keep themselves updated with the current market trend for making good money.
