When you have a thing for money, business and trading, then you might have heard a lot about forex trading.

What is forex trading and why it is going strong in 2019? – And you might have been bumping into people who are trading the FX trading and have numerous arguments to prove it as one of the best engaging capital markets in the world. With the daily trading market of $8 trillion, it might also seem true.

All these facts and figures, and raving people, the fx market has more stories of losses, than stories about the road to riches. But despite all the volatility and unpredictability associated with this currency market, it is still going strong, and more and more people are stepping into this turbulent market to test waters.

But what is forex trading, and why is it getting so popular still in 2019?

What is Forex Trading?

The whole world doesn’t run on one currency pair. Businesses dealing within forex with people from different countries, or people travelling to other countries have to convert their currency into the currency of the other country. And that is where fx trading comes into action.

Forex, also called foreign exchange, is forex trading of different currencies between seller and buyer. Previously, the forex market was only comprised of big corporations and central banks. But now individual retailers are also coming into the scene with money as low as $500. But little fluctuation in the prices can put them in a risky position strikes.

One of the reasons why it is gaining immense popularity is due to its easy accessibility. You can engage in it within the premises of your home while sitting on your couch because it all happens online. You just need a digital phone or laptop and internet connection to become part of this $8 trillion market.

24/7 Open Market:

The stock market has a particular running time, but not the forex market. This market runs on the international level, and different areas of the world have different time zones. The night in Asia means morning on the other end of the world. So, retailers in Asia can work with people in America during their business hours. It also means that you don’t have to compromise on job and take forex trading as a side gig during your best times.

Little Margin of Manipulation:

Another benefit of the FOREX market is its high level of liquidity. It means that you can buy the currency from the capital market without facing any drastic change in its actual price. The money exchange market is a huge market with so many people involved and 24/7 working in it that it is very difficult to manipulate the market price and scam others. That’s why the forex market is called as liquid and best suited for newbies who are fearful of being scammed.

The Forex Market for Beginners

It seems like something that most people would find easy, except, in this particular industry, there is a high rate of failure among new traders because there is quite a steep learning curve.

Even traders that are aware of that tend to start out with the attitude of “It happened to them, but it won’t happen to me.” In the end, 96 percent of these traders walk away empty-handed.

Forex trading is not a scam; it’s just an industry that is primarily set up for insiders that understand it. The goal for new traders should be to survive long enough to understand the inner working of foreign exchange trading and become one of those insiders, and this will come with studying the market, understanding the terminology, and learning trading strategies.

Forex and Leverage

The number one thing that hangs most traders out to dry is the ability to use a trading feature called forex trading leverage. Using leverage allows traders to trade in the market using more money than what they have in their account.

Trading with leverage sounds like a really good time, and it’s true that it can increase how easily you can make money, but the thing that is less talked about is it also increases your risk for losses.

Most new traders, being optimistic, might say “but I could also double my account in just a matter of days.” While that is indeed true, watching your account fluctuate that seriously is very difficult to do. Many people start out assuming that they can handle it, but when it comes down to it, they don’t, forex trading mistakes are made, and accounts are emptied.

What is forex trading and why it is going strong in 2019The Market and Your Emotions

Assuming that you can manage not to fall into the leverage trap, the next big challenge is to get a handle on your emotions. The biggest thing that you’ll tackle is your emotion when trading forex. The fx market can behave like a roller-coaster, and it takes a steel gut to cut your losses at the right time and not fall into the trap of holding trades too long.

When traders become fearful because they have money in a trade and the market’s not moving their way, the professional sticks to her trading method and closes out her trade to limit her losses. The novice, on the other hand, stays in the trade, hoping the market will come back. This emotional response can cause novice traders to lose all of their money very quickly.

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The availability of leverage will tempt you to use it, and if it works against you, your emotions will weigh on your decision making, and you will probably lose money. The best way to avoid all of this is to develop a trading plan that you can stick to, with methods and strategies you’ve tested and that result in profitable trades at least 50 percent of the time. In fact, not only should you have a trading plan, but you should keep a forex trading journal as well to keep track of your progress.