Factors of Successful Forex Trading

Those who want to take much profit in forex trading must have good trading methods, sound money management principles and disciplined trading. Here are the advantages of forex: LEVERAGE: The deposit (money) you have in your forex account with a broker is referred to as collateral(margin) for getting a loan(leverage) from the broker to trade any required amount of currencies. Leverage gives the trader the ability to make extraordinary profits and at the same time keep capital risk to a minimum. Some forex firms may offer 200 to 1, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. In order to take full advantage of leverage so as to maximise profits and minimise risk, you need to master good trading tactics and good money management rules. LIQUIDITY: Because the forex market is so large, it is also extremely liquid. This means that with a click of a mouse you can instantaneously buy and sell at will. You are never 'stuck' in a trade. You can even set the online trading platform to automatically close your position at your desired profit level(limit order), and close a trade if it is going against you(stop order). PROFIT IN BOTH 'RISING' AND 'FALLING' MARKETS: Forex trading has the ability to generate profits whether a currency pair is 'up/bullish' or 'down/bearish'. A trader can profit by taking a 'long' position, (buying the currency pair at one price and selling it later at a higher price) or a 'short' position, (selling the currency pair and buying it back at a lower price). 24 HRS TRADING: You can trade 24hrs a day. This is very desirable for those who want to trade on a part-time basis, because you can choose when you want to trade-morning, noon or night. 'MINI' TRADING: Going into currency trading must not require a lot of money. Online forex Firms/Brokers now offer 'mini' trading accounts with a minimum account deposit of only $200-$500 with no commission trading. This makes forex much more accessible to the average individual, without large start-up capital.