Asking whether investing in Forex is a promising venture or not is like asking if it is worth it to become a lawyer or an engineer. If you do your due diligence and practice becoming good at it, you may profit from this trading platform. Although, it would be vague to tackle the subject from this point of view.
This article will discuss whether investing in Forex is worth it, based on facts and figures revolving around the trading platform.
What Exactly Does “Investing in Forex” Mean?
Forex or foreign exchange is one of the most liquid asset markets and trading platforms on earth. Investing in Forex means that you trade one national currency against another and if the value goes above your original trade, you profit.
It is pretty straightforward in theory. However, the percentage of successful forex traders is low. The reason, most of the time, behind this slump is indiscipline and lack of strategy.
How Much Can You Earn in Forex?
Several factors dictate how much returns you get for every trade. Your gains will often be affected by your strategy, the type of trading you venture on, the frequency of your trading, and your discipline.
It’s not something one jumps on abruptly without thought. That said, depending on your investment, investing in Forex may result in 20 times what you put in if done correctly.
Pros of Investing in Forex
Wherever you are, you can get set up with an account within 1-3 days, and the market is opened 24 hours per day and five days a week.
Having leverage is essential if you want to amplify your potential gains from trades. However, rookie and inexperienced traders may suffer immense losses in investing in Forex if they use this feature without a proper strategy.
Forex trading is highly liquid, which means that your investment is fast-moving. You may also withdraw your funds after around 3-5 days of processing.
Cons of Investing in Forex
The forex market is no different from other platforms when it comes to volatility. And if you plan to make short-term profits, you will suffer extreme volatility and render your investment in forex moot.
Small-time traders are at a disadvantage.
Although this is true for almost all markets, it is no different with forex trading. Small-time traders who do not have access to information and technology will bow to hedge funds, banks, and more critical financial institutions who also share in the market.
Be sure to be aware of market conditions to be profitable in the trade.
Lower residual return
Unlike stocks and other investments that give dividends regularly, capital gains in forex trading are only obtained from the appreciation of one currency in a given currency pair.
Investing in Forex can be a profitable venture if you properly strategize and have the right tools to accompany you throughout the process. It is essential to familiarize the market and the possible benefits compared to others like stocks. Planning and practice are also equally important to know the ropes and be more confident with the procedure.
So is investing in Forex worth it? Yes.