Friday, November 7, 2008

Forex Trading - A Potential Home Business?

Many people are interested in forex trading and ask themselves if it's possible to trade for a living and have it be their main source of income, or should I say thier home business.

In short the answer is yes. In fact I've personally done it myself. Having taught in the public school system for more than 3 years and having left that in the past to work full-time at home as an active trader the rewards have been wonderful.

However, trading for a living is like anything else, it involves work and time committment. I see far too many people getting involved in trading who do not properly educate themselves first and openly tell people I spent nearly five thousand dollars on systems and education that I probably could have saved had I known then what I know now.

What I didn't realize is that just because a forex system that claims to have all the right tools for one thousand dollars, five hundred dollars or whatever the case may be doesn't mean it's the best possible information or even best system out there, in fact it's more than likely the same information is avaliable in a cheap fifty nine dollar ebook, and that's the truth!

I did run into some quality mentorship programs and systems, not all were complete junk and believe it or not the best information was the cheapest.

If planning to take forex trading to the next level and running it as a potential business, my advice is to do your research and properly educate yourself on the subject matter. Set aside a specific time each day that you will dedicate to your eduation and of course your trading. If done correctly and with discipline, forex trading can turn into a profitable home busienss for those with the right mind-set and eduction.

FOREX Trading Advantages

High Liquidity

The Forex market is the most liquid market in the world. The daily trading volume is US$ 3.2 trillion. That gives the trader an unparalleled freedom to buy or sell a position. You can exit your position at will any time you wish without barriers or limitations.

24 Hour Trading

You can trade the Forex market effectively 24 hours a day. Compare it to the stock market! At any moment during the 24 hours there will be Forex traders somewhere in the world actively selling or buying. You can respond to any breaking news immediately.

Small Margin / High Leverage

You can control a position with a 1% margin or less. It means you can buy or sell US$10 000 worth of currencies with only a US$ 100 margin deposit using leverage 1:100. It gives you the possibility to make extraordinary profits. Depending on the agreement with your broker you can get even a higher leverage, typically up to 1:400.

Commission Free Trading

The Forex brokers have no commission charges. They compensate for their services through the bid/ask spread that is typically less than 0.1% (10 points or pips)

Unrestricted Short Selling

Since you are always selling one currency and buying another one simultaneously, there is no bias to the market. It is equally easy to buy a currency pair as it is to short sell it.

Nobody Can Manipulate the Market

The immense volume of the daily Forex trade makes it practically impossible for anybody, including any central bank, to effectively manipulate the market prices.

Investors at all levels can easily access the Forex Market through the Internet. You can execute your trades instantaneously off the real time streaming prices seen on your monitor.