Forex has always been the best market to trade. But this year the foreign currency trading has reached a completely new level. Today we are going to discuss the top 10 reasons why Forex is the best market to trade in 2020.
What Is The Forex Market In 2020?
It is impossible to ignore: 2020 is a challenging year for the entire planet. The virus pandemic got us locked inside, unemployment rates are going through the roof and, worse of all, no one knows how the year will turn out at the end.
But I am not here to bum you out. There is good news too: right now is the best time to both kick start or boost up your Forex trading career. Why is that?
The best Forex market to trade is the one with the most participants. The more traders are invested in the process, the better. Price movement of any currency largely depends on the amount of attention it's getting. And at this moment there is more attention than ever before.
While the world’s economy is figuring out the ways to get out of this mess, traders everywhere jump into the trading pool to get the best position for the future. Taking the opportunity to get extra profit in times like these is definitely wise.
So wise, in fact, that we came up with an entire list of reasons why Forex is the best market to trade in 2020.
Reasons Why Forex Is The Best Market To Trade
Forex is the biggest and the most liquid market in the world. Over ten million traders worldwide exchange more than $5.3 billion daily. Some profit, some not. But the main idea is that absolutely anyone can benefit from trading currencies.
But why exactly do you choose Forex as a market to trade on? Here are the top ten reasons.
Back in the day currency trading was a rather exclusive process. Traders were gathered in physical spaces, where they constantly bought and sold currencies by taking phone calls. You can imagine, it was quite hectic.
Modern trader is simply a person sitting in front of their laptop at home or in the office. It doesn’t even have to be a full on computer: trading platform apps allow us to trade using a smartphone or a tablet. Anytime and anywhere.
Prior to the start of 2020’s pandemic, we didn’t really value the privilege of being able to make money from the comfort of our couches. But as the tables turned, and the only people who remained at their jobs are first responders and remote workers, everyone started to look for a way to become a part of the whole work from home movement.
But it’s not just the physical convenience that makes Forex the best market to day trade or trade in any other style. Becoming a currency trader is also extremely affordable.
Most other types of investments require a decent amount of initial capital. On Forex, however, you can start with as much as $10. Although it is very unlikely that you’ll turn a ten into a ten grand, there are still plenty of opportunities to get a solid profit and multiply your very first deposit at least a few times.
It is not always the amount you are trading with. Most of the time it is how you trade that makes the market progress forward. Which brings us to another good reason to become a Forex trader in 2020: volatility.
Why is it important that Forex is highly volatile? Well, in simple words: volatility is the foundation of profitability.
Trader’s profit comes from the difference of two currency values. And the more that difference fluctuates, the more there are chances to benefit from the foreign exchange market.
Now, where does this volatility come from? One of the reasons why Forex is the best market to trade is that it is equally promising to those who buy and to those who sell. The logic is very simple: every buyer needs a seller and vice versa.
And that balance between buyers and sellers, also referred to as bulls and bears, is the explanation behind price values constantly going up and down. Getting a good grasp of how the chart forms and learning to take advantage of volatility is practically a guarantee of trading success.
It is also worth mentioning that such high amounts of trades call for an advanced technology to be properly processed. Does Forex deliver there as well?
Foreign exchange without online trading platforms is possible: go to a local bank and exchange any currency you have to another currency. Then wait for the values to change to your favor and complete an opposite transaction by once again going to the bank.
The problems with such an approach are: inconvenience, bank regulations, office hours limitations and the anxiety of carrying a large sum of money on the street. Online trading has eliminated all of these.
Today you don’t have to handle physical cash or even leave your house. Everything you might possibly need during trading is right there on your computer screen. Now, you can deposit the funds from your online banking portal into a Forex account, gain profits through trading and withdraw them back to your card. It has never been easier.
All best markets to day trade, for example, heavily rely on the technological aspects. Powerful and effective platforms, such as Metatrader 4, allow traders everywhere to process all kinds of trades as well as to analyze the market and build strong strategies.
Forex is the best market to day trade. And to swing trade. And to scalp the market. Basically, the currency exchange market is ideally suitable for virtually any trading method out there. This means that there is a chance for absolutely anyone to find their goldmine and tap into it for as long as it is profitable.
Yes, it might take you some time to establish which strategy works best for you. But as long as you are persistent and smart in terms of risk management: everything will work out great.
You can start by checking in with yourself and outlining a few criteria for your perfect Forex trading strategy search. Decide on what kind of trader you would like to be by evaluating the amount of time and resources available to you. Consider how many trades you will be comfortable handling on a daily basis and how much stress you can be comfortable with.
Judging on this, find a few strategies that seem the most appropriate and give them a go. Don’t feel confident enough to bet your money on a completely new method? That’s what demo accounts are for.
Trading With A Demo Account
You know how pilots spend hours in a simulator before touching a real aircraft’s control panel? It makes sense because this way future captains get to experience the amount of responsibility and concentration they’ll need later on, without putting anything at risk.
Unlike pilots, Forex traders aren’t responsible for anyone’s life. However, there is still a lot to risk, such as personal financial assets. Finding a reliable broker can play a great role in getting the appropriate level of security. And what helps even more is your broker’s ability to provide access to a demo account.
Demo accounts simulate real trading processes using the same platform tools and live market data on price quotes. Since the trades in demo mode are not real, no deposits are necessary. And as a logical consequence: no money is at risk.
You can take your time and learn every little aspect of foreign currency trading without having to stress yourself over every decision. Use the demo account to choose the most effective strategy, work out your own trading preferences and maybe even come up with your very own techniques.
There is really no limit on how to use the demonstration account and it is definitely worth considering.
Many of the most successful Forex traders started small. Becoming a profitable trader is possible for anyone who is confident enough and doesn’t tend to give up too soon. Patience and cold thinking are the best stimulants of trader’s growth.
Once again, just like the size of your initial deposit will reflect in the significance of your first profits, the effort you invest in becoming a successful trader will be proportional to the quality of your skills.
The trick is to realize that there is technically no limit to how successful you can become. So, focus on gaining as much knowledge as possible and building long term plans. A journey to profitable Forex experience is not always easy, but it comes with a few pleasant bonuses here and there.
- Bonuses And Promotions
Forex brokers are sorted into several categories. Some brokers have more experience than others, some offer a wider spread of services. But at the end of the day trader’s appreciation strongly relies on things like promotions and bonus offers.
Everyone likes getting slightly more than expected. On Forex a bonus may come in a variety of shapes and sizes. Sometimes a promotion would let you access higher leverage ratios or allow you to trade outside your regular boundaries.
Whatever they are, there are so many options to choose from when it comes to something extra on Forex. Make sure to take every opportunity there is and enjoy currency trading to the fullest.
One other highly valuable reason why Forex is the best market to trade is the way it’s regulated. It is true that in most countries the regulation is rather strict and limits traders to making far fewer moves than they would’ve wanted to.
However, there are some broker companies that are registered as global and therefore they are subjected to very few limitations. The way it works is usually by the license issued by a government that doesn’t mind the idea of currency trading.
As a result, the traders get to trade as much as they want with whatever amount they want. Just make sure to follow the rules specified by your broker, if there are any, and you are golden.
We’ve already mentioned that there are over ten million Forex traders worldwide. And with the virus pandemic this number started to grow more rapidly than ever. This means that anyone will be able to find others to consult with or share trading related thoughts and experiences.
How can this be useful? The first answer that comes to mind is the ability to see the market from several angles. Although market analysis is very straightforward in theory, it can still be quite subjective depending on who’s looking.
Different trading styles, analysis tools and calculation techniques bring a variety of available options. Being a part of a trading community can help to provide your insight on how specific strategies worked out for you and find other ways to benefit from the current scenario.
Additionally, some particularly large trading communities also hold a certain amount of power. Since the price movement is driven by traders, the majority’s opinion is crucial to the process. And when the majority is communicating and comes up with similar solutions it can bring visible changes to the chart.
Even if you consider yourself a loner, and rather not share your insights with anyone, it would still be useful to check with trading communities once in a while. This will help you remain updated in terms of any new tools or techniques as well as to see what the crowd is most probable to behave like.
- Education Materials
Just like there are many trading communities out there, there are also hundreds of attention-worthy educational material sources. The variety of learning styles and tools to get to know the trading process from inside and out is definitely one of the reasons why Forex is the best market to trade.
Forex brokers and traders are willing to share the useful info, because the higher is the trading volume, the more there are chances to profit. So, you can choose a learning source to your liking: video, blog, demo account challenges and as on.
Your task is to open your mind to a non-stop stream of information and come up with a system of learning. Start with the basics and gradually move forward or jump directly into complex concepts, as long as you are taking it one step at a time and paying maximum attention, it will work.
Last but not least, a great reason why Forex is the best market to trade in 2020 is current conditions. Check out any fundamental analysis report and see for yourself this is the time like no other.
More traders are actively participating, generating a constant flow of currencies in every direction. Large companies making drastic decisions on the market to stay afloat. Finally, due to the outside being practically infectious, we have to stay in and make the best out of this isolation.