The benefits of Forex if you want to become a trader in the United States
In the 21st century, virtual trading on exchange rates has replaced the traditional options for making a profit. The universal way of earning can be called Forex — the international market of currency exchange at free prices. It appeared in the United States in the seventies of the last century, and with the development of information technology has become a source of income for millions of people. The process of trading itself is called trading, and those who take part in it — traders, and everyone can become one of them. But, as any other activity, earning on currency trading has a number of nuances, which you need to know.
One of the first Forex millionaires was American Larry Williams who managed to turn an invested $10,000 into $1.1 million and then repeated the same result.
It is not correct to call Forex an exchange, as many traders do, because:
- trading process does not stop for a moment (you can buy/sell 24 hours a day);
- instantaneous opening and closing of trading positions;
- huge number (millions) of participants from around the world — to trade, in fact, all you need is an Internet connection and the desire to earn;
- minimum initial investment — at the initial stage it is possible not to invest real money at all, using demo accounts;
- general accessibility due to margin trading, low running costs and lack of restrictions in terms of profession, age and skills of the participants;
- high profits due to the impressive volatility of exchange rates;
- variety of financial instruments, including cryptocurrencies, along with securities and conventional currencies;
- you can make money on both the decline and the rise of assets. The main thing is to choose the proper instrument and strategy.
As in any trade, there are risks in Forex, but with careful preparation and selection of a reliable broker, they are leveled, so the number of those who want to become traders is steadily growing. Among the difficulties of currency trading it is worth noting:
- variety of factors simultaneously affecting the rates;
- absence of guarantee of obligatory execution of orders;
- fraudulent schemes;
- necessity of financial knowledge and experience for implementing complex trading strategies.
As a matter of fact, risks are minimal and are mainly connected with inexperience of trader. Applying to the brokerage organization will help to correct the situation. Large companies offer free training for beginners and provide good leverage for making profitable deals, guaranteeing withdrawal of funds with a certain periodicity. Trading without broker is difficult and financially unreasonable, that’s why its searching is one of the first-priority tasks for a trader (either beginner or professional).
First steps to success
Every trader has his own secrets of successful investing and the majority of successful traders state that they develop these skills with experience. Many people quit trading after the first unsuccessful deal, but experienced traders advise to take it as another lesson and improve. In general, flexibility of mind and the ability to constantly evolve are very important in currency trading, because everyone receives the same basic knowledge, and how to proceed — it is up to you! Each transaction cannot be successful, so you need to focus on the long-term result (how much you will earn in a month, six months, a year, etc.).
Among key components of profitable trading it is necessary to name:
- accuracy of predictions;
- reliability of the broker and convenience of work with the account;
- ability to use economic Forex calendar;
- flexibility of leverage;
- high speed of order execution.
Very large sums of money circulate in the global financial market every day. And the task of any speculator is to find a way to this wealth. All participants of the currency market can earn on the fluctuations of the exchange rate. And now not only major banks and brokerage companies can boast of high income on the Internet, but also ordinary people who were able to set up work on Forex.
- You don’t need to study to become an economist or a financier to make money on Forex. It is enough to learn the basic rules and mechanisms of the trading process. In addition, you will need a lot of patience, because in the beginning the profit will be minimal. Or there will be no profit at all at first.
- You can work on Forex when it is convenient for you. That is, this business does not interfere with your main work. The market operates around the clock (except Saturday and Sunday). So you can easily find the time to make some money.
- New technologies are constantly appearing in this area. And now a trader does not have to watch the currency market day and night. After all, the trading terminal can be configured so that it opens and closes positions automatically. Of course, you can control the trading process yourself, if that is more convenient for you.
- All the investments of the market participants are kept in very reliable banks. So, you can have no fear for the safety of your money. You can withdraw your profit anywhere in the world, so you don’t have to sit in one place because of Forex trading.
- You can freely move around the world, and you can still work on the currency market. In order to predict the exchange rates you need to analyze the different economic news and indicators. This information is publicly available, so you can always find it.
- You can start to work on Forex with the minimum deposit. There were cases when traders in a short time increased their capital by several times. As you understand, this once again confirms the enormous opportunities of the Forex market. That’s why this business can be called one of the most profitable legal ways of earning.
One more important point: to start to work on Forex, you do not need to get any licenses or permits. After all, trading in the foreign exchange market is everyone’s right. In addition, the speculator need not fear that his account data will fall into the wrong hands. No one will know the amount of his income. Any brokerage company cares about its rating and authority. That’s why brokers never frame their clients. This once again proves that Forex is an honest business.
Fundamental analysis in the US Forex market
The subject of studying the fundamental analysis of Forex is those key factors that drive this market. These include all the main indicators of the economies of individual countries, as well as the state of the economy on a global scale, which has a definite impact on currency rates. In addition, the fundamental analysis includes consideration of the political situation in a particular country, which necessarily affects the state of the financial, economic and credit sector.
In this case the information about the activity of central banks and deposit rates is the most useful. But generally speaking, practically all aspects of life in one or another country are important for fundamental analysis — from political situation and expectations of separate social groups to forecasts for the future, up to unverified rumors.
Fundamental analysis includes not only collecting all kinds of information about the factors that can affect exchange rates, but also allows you to structure the data by selecting the most important ones. Such data includes, first, the gross domestic product, state of national industry, balance of trade and main sources of raw materials, as well as money turnover on the internal market, inflation growth, crime rate, position of the country in the world community, success of foreign economic activity and level of demand for securities.
The qualitative and effective fundamental analysis is not an easy thing, because it is necessary to take into account not only separate factors, but also the conditions of their influence, i.e. to follow the dynamics of the events all the time. It may happen that with changes of certain parameters some factors that used to be critical turn into insignificant ones.
So, if a trader wants to succeed in the fundamental analysis of the Forex market, he has not only to know the basic economic laws, but also to be aware of many related disciplines, as well as to be able to find the cause-and-effect relations in such phenomena, which relations are not evident at the first sight.
Taking all this into account, for a fundamental analysis of Forex market there can be at least two categories of events. One of them can be expected with the highest probability and even be pre-planned. These mainly include the events of economical and partly political life of the country. Others are virtually unpredictable, not amenable to prediction. This includes all kinds of natural disasters and other natural or social cataclysms, which usually have a negative impact on the stability of the national currency. Nowadays, the fundamental analysis also covers the study of the local wars, and not only the biggest ones.