Is Forex Trading Profitable? - Best Way To Trade Forex Profitably
Is Forex Trading Profitable is the most awaited question for people who are interested to know about the profitability of forex trading? Most of the time, traders are concerned about profitability, rather than using proper trading methods.
Moreover, the Forex market is sustainable because it is generating continuous profit. If it is not profitable, then the Forex market would have unpopular and faded out.
As a trader, you need to have a trading philosophy. In general, trading philosophy is combinations of 3 points:
Anyone can trade Forex, but not everyone can earn profits. Trading in the financial market is a game of chess. Before trading in the financial marketplace, experts think to move three times ahead to make profits.
As we all know, the Forex market is the extensive financial marketplace in the world. So, to make a profit, you have to understand the term forex properly along with those factors that bring success.
On the other hand, the average forex traders lose money due to the limitation of knowledge. Additionally, most of the trader wants to take profit within a short time. You can consider it as greed.
Opening a position without any knowledge is the real discouraging thing for traders.
Why Forex Trading
We covered almost everything in what is forex trading article about the basics of Foreign Exchange market. However, in a few words, trading of one currency in another currency represents forex.
There are so many trading opportunities in the financial market. However, almost everyone prefers currency trading as a passive income.
But, why Forex?
The answer is simple and straightforward. Making money with forex is a secured long-term process. On the other hand, the currency market is attractive.
New traders who trade for a few days also have similar feedback about Forex. The unique characteristics make it attractive compared to other trading assets.
As we all know, the FX market has the highest liquidity. Let us have a look from where this liquidity comes.
Where Does This Liquidity Come From
Liquidity refers to “the availability of liquid assets to a market or company.” Similarly, it defined as a market value of a particular product or services.
You can trade 24hours in the Forex financial marketplace depending on your trading time zone. As a result, the liquidity also depends on the different trading time frame.
There are so many sources from where liquidity comes into the currency market. These are:
- Unofficial and Official Market
- Electronic Communication Network
- Clients who need a currency exchange
But sometimes the Foreign exchange liquidity effects for various reason. There are so factors involved with the trading market which affect the Forex market liquidity.
Forex Market Unique Characteristics
We have already acknowledged that the forex marketplace is unique for its characteristics. However, the main uniqueness of currency market is its size. The size of the market is vast. As a result, many people can perform their trade daily.
Having the largest trading volume can bring advantages to traders. Apart from the market size, there are also some other unique characteristics of forex trading
The central governing body does not have control over the Forex market. You can trade from anywhere at any time. There is no restriction in the Forex market. Traders can exit, enter, and edit their trade anytime they want. Additionally, traders can communicate with each other via electronic networks.
The Forex marketplace is regulated by the financial authority. However, it is less regulated than in other financial markets. Banking Law regulates its activities.
Unfortunately, retail traders are often scammed for performing with a non-regulated trading broker. It is advisable to trade with a licensed and regulated broker by various regulatory bodies.
Easy To Access:
Forex market is easy to access. Moreover, you don’t need to wait for any institution. It has leverage facility for its traders. Brokers offer leverage to trade with a large amount of money.
Trade On Weekend:
Traders have the opportunity to trade 24 hours; 5 days a week. It is also possible to trade at the weekend. In weekends, traders place trades through the central bank and other organizations.
Full Access To Market Data:
Forex traders have full access to market data and information. You have the ability to trade directly with the market maker.
In that case, transparency is higher than any other financial market.
Is Forex Trading Profitable
As a Forex analyst, we used to write on different topics which are related to finance, and people asked us different questions through e-mail.
Among those queries, “how profitable is forex trading” commonly asked by many traders. So, you can not expect a short answer to this question.
On the other hand, forex trading profitability depends on different factors and rules. Additionally, the proper trading strategy is equally important. Because in reality, it is not possible to play only with numbers.
As a trader, you have to forecast the trading market and analyze the asset price based on the different market situation. Selecting the right Forex pair with the right time will help you to fill the bag.
Discipline is also a point that people often overlooked. Overall, you have to make a plan before placing a trade. Let’s discuss, how to increase profits in Forex.
How To Make Forex Trading Profitable - Increase Profits
Winning a trade is not simple without having proper trading strategies. It is better not to find any short-cut way to make money.
By following these 9 steps, traders can avoid losing money in Forex. On the other hand, these tips will also help traders to make forex trading profitable.
Let’s have a look the best ways to trade forex profitably.
More than 90% of traders lose their money for not investing wisely in the Forex marketplace.
New traders quit Forex after losing money. Avoid the mentality of beating the market. Understand the marketplace and join in trading.
We have already talked about the Forex trading strategies in our other articles.
In Forex trading, traders have their own trading strategies or they copy from other person’s strategy.
Forex strategies will help you to trade with a small risk. Looking for long-term trends is good for traders rather than hourly based trading.
By using different tools and technology, traders can know the current Forex pair’s price movement.
Remember, price action strategy works for all market conditions. Price strategy keeps your trading strategy simple.
There is no right way or wrong way in Forex trading. You need to choose the right strategy for the right situation.
Before putting your hard-earned money, test your trading strategy that you are going to apply.
Free demonstration account is the best solution, where you can test your strategy.
Practise accounts are offered by various brokers, which are filled up with virtual money.
If you are losing virtual money, there is no risk involved with it.
In Forex, it is important to know how to set stop-loss and take profit.
You should always have your stop-loss. After putting stop-loss, you can decide how profitable your trading is.
The strategy will help you to select stop-loss at a certain point.
It is important to learn how to manage emotions. Say goodbye to negative emotions which you have.
Try to develop your positive emotions. Build up your tolerance power and stay focused on your trade.
Professional traders do not take decisions recklessly. One imperfect decision can damage your account.
One of the most fundamental skills is to identify Forex trends. Forex trend can be short term, can be long-term, and can be in different parts.
For the traders, it is important to know that how long the moves take.
Longer moves will give a stronger trend.
The trend can be changed based on price movement. Price can increase or decrease. In price action trend, price moves rapidly.
Movement of the currency price in the Forex marketplace helps traders to trade in the right way.
Forex market is huge. Numerous people open their trading position at the same time or trade in a different time frame.
Day to day market update will help traders to get the latest news. Try to check the Forex calendar. Check your trading line to know either your trade is going right or wrong.
It is impossible to change the political behavior of a country but we can handle this change with proper care. A volatile market is also an issue to change in Forex trade.
Forex market sentiment is the tone of the market. Depending on the market sentiment, traders invest their money in the Forex marketplace.
Rising prices indicate the bullish market where decreasing prices indicate the bearish market.
Market sentiment also depends on the fundamental analysis.
Forex profitability depends on the market sentiment all the time. Novice traders please trade after analyzing the market mood.
Expert investors and traders never stop learning. They try to educate themselves ongoing basis.
There is no formal trading education for traders. You can read different articles, can discuss with expert traders, and can earn knowledge from live webinars.
Enriched trading education will make you a successful trader.
Choosing The Best Forex Trading Style
What is the best way to trade forex? In general, there is no such a particular way to make money with forex.
Traders have to choose their trading style depends on the trading experience. Furthermore, each trading style has its unique strategies. On the other hand, appropriately using the trading time frame to bring profits.
The trading time starts from minutes and extends to a year. It could be short or long. Many traders do not pay attention to trading styles, although it is one of the keys to earning profits.
There are 4 types of trading style depending on the trading timeframe and strategy.
Scalping is a very rapid trading strategy. It is just a strategy used by day traders. Those traders who use scalping trading time frame, are known as scalpers. Scalpers take a small amount of profit from trading.
Moreover, it is the shortest time frame in the trading market. The trading time frame starts from second and ends up in a minute. Profit target will be less than 20 pips.
Is forex day trading profitable for new traders?
Before disclosing the chapter, you have to know a little about day trading. Mostly, day trading happens when traders buy and sell currencies in the same day.
However, scalping is a form of day trading but, there are some differences between these two. For day traders, the time frame lasting from second to an entire day session. On that particular day, all position will close before the market closes.
Traders can trade multiple times on the same day, whenever they want. At the same time, the trading strategy is very simple.
You have to trade continuously if you want to perform more than one trade on the same day. On the other hand, risk management is also necessary.
Swing trading is one of the most popular forms of active trading. A day trader and a swing trader adopt the same strategy. The main difference between these two is the time frame.
In swing trading, traders do not trade less than two days and not more than 3 weeks. Traders hold their position at least one overnight.
Those traders who have the extra patience to trade with this strategy will have success in the end. Position trading is the longest-term trading period in a trading position.
Holding position starts from weeks to month even sometimes till a year. It is the opposite of day trading. As the Forex market is volatile, so it is difficult to see the use of this position trading very often.
In Forex trading, it is really important how you are choosing your trading style. Before picking up a particular trading style, traders must consider some factors.
It is important to have a proper account size, trading experience as well as the risk-taking mentality. The trading style of a trader will depend on the risk tolerance level.
Instead of copying other traders style, be faithful in your trading style and choose the best one which suits you.
How To Trade Forex Profitably
FX is the most traded market in the world which is commonly known as the Foreign exchange market. For retail investors, Forex trading is popular compared to other trading classes.
There is no fixed way to trade forex. But, there are some steps which you need to follow before executing each trade.
- As an investor or trader, you need to know about Forex trading. The basic knowledge on the FX market will make your trading simple.
- It is necessary to choose a broker which is regulated and trusted. Do not forget to look at other trading features offered by a particular broker.
- You have to choose the currency pairs wisely.
- Analyze the trading economy or the market economy. Reading news will help you to predict the currency price movement.
- Make your first trade by adding trading orders. Stop Loss order will help you to minimize your risk.
- Monitor your every trade. You can track the price movement from your desktop device as well as the mobile application.
- Finally, close your trade when you are ready.
Forex Trading Attitude
Generally, traders do not look at their mistakes. In the trading marketplace, it is a common phenomenon.
Most of the case, they want a proper trading strategy to place a trade without having a proper plan.
Moreover, trading attitude is very important. To be a successful trader, you have to follow a proper trading style.
Remember, your excellent analytical ability and its implementation will bring success.
To make a Forex trading profitable, you have to follow 3 categories which are:
Notably, a few traders can earn a living from trading Forex. Trading is not all about intelligence.
You can also trade with your average intelligence. Successful traders have these above qualities to make constant profits from Forex trading.
Power of the mind is the main weapon in Forex trading. Make differences between good and bad strategy. Forex trading attitude will help you to make a profit.
A proper mindset with practicing tools and the best strategies will lead you to be a good and profitable trader.
Set Forex Education Goal
It is not easy to collect profit from the trading market. With the help of a demo account, you can learn to trade.
However, the practice account will not help you to make money.
Set your goal according to your needs. To hit the target, you have to go through a process.
With a good plan, traders can manage their trade and earn a profit. Before setting a plan, you have to know how to set a proper plan for Forex.
In your trading goal list, you can add these topics:
- Keep track of your daily trading record.
- What you are trying to achieve.
- Learn as much as possible.
- Keep your mind cool.
- Set your trading style.
- Follow Expert traders
- Focus on money processing style.
Forex Economic Calendar
Traders have to be updated in different Forex news. For traders, it is important to make the right decision at the right time.
Along with this, you need to have an idea about when to enter into a trade and when to exit.
By using an economic calendar, traders can pay attention to global events. Upcoming financial information can be acquired from the economic calendar.
Traders can get an idea of the economic market and take the right trading moves.
Do not Open A Big Live Account
We heard from different forums that people are losing their Forex account because of their greed.
While trading the Forex market place, you have to stay strong. Trading Forex is not a game.
By following the trading rules, you can make money with Forex. The beauty of the Forex is that you can trade with a very small amount.
You don’t need to open a big live account. By using the demo account, you can make yourself understand Forex properly.
Right position sizing and risk management will educate you to trade in a live account.
What Is Carry Trade
Another way to earn profit from Forex trading is Carry Trade.
In the forex market, carry trade is the most popular trading strategy.
Buying currency at a low price and sell at a high price is the main goal in a carry trade. Moreover, traders can earn profit from the differences in the interest rate.
People involve to buy and sell an asset with a very low-interest rate and use that fund to purchase another asset.
The best time to use this strategy is when the central bank increases the interest rate.
The profit or gains from the carry trade can be very large. Especially, when traders use leverage.
Know Your Forex Broker
Knowing about broker platform is necessary for traders. However, you will find all information related brokers on their websites.
Please read brokers rules and regulation properly before opening an account.
There are so many brokers in the Forex marketplace from where you can choose the best one.
Brokers who are offering low spread is the best choice for traders. Some brokers offer commission.
The Commission is a fixed amount offered by the brokers instead of accepting spread.
It is wise to trade with low commission. Basically, the low spread will save your money and help you to get more profit.
Forex brokers offer different trading platforms for traders. You will find trading tools, charts, and other features. Forex trading platform has real-time data, news, and so on.
To compare, you can open more than one account on various broker’s platform.
High leverage is not good for new traders although, leverage is important. Minimum leverage will carry a minimum risk.
Brokers offer different kinds of accounts. The Account allows you to trade with different leverage.
The Improvement As A Forex Trader
As a trader, you have to make yourself perfect for trading business. The improvement as a trader is so important for earning enough profit.
If you are seeing that, you are losing your trades very often or continuously, then just don’t freak out.
Try to identify your problems. Review your trading plan again and again. Compare your trading plan with others. Eventually, you will be a professional Forex Trader.
Don’t copy other traders trading plan, if you are not completely familiar with this.
Overview your trading strategy on a daily basis. Research the trading market properly. These will help you to identify your problems.
In Forex trading after identifying the problem, please make a blueprint of the problem.
Apply the best solution metric to improve your trading strategy. Stop blaming your system and take responsibilities.
Most of the traders have goal-oriented thinking. However, professional traders always have process-oriented thinking.
In process-oriented thinking, traders think about how they will execute their trade.
Is Forex Trading Profitable For You
People get confused before investing money in Forex trading. Forex trading is for everyone.
Anyone can invest money in trading. The profitability depends on how they trade their trading assets.
The forex marketplace is a high-risk market. The potentiality of profit is also high as the risk is high.
We would like to inform you that, please prepare for loses if you want to do profit.
On the other hand, the Forex market is reliable and as well as regulated.
There are so many investment strategies. People choose Forex as the best investment strategy.
Read the below phase to know the answer. We will discuss the differences between Forex and other investment strategies.
Why Forex Trading Is A Good Investment
People want to invest their hard-earned money to get extra benefits or profits.
In most case, people invest to earn extra profit. In all investment strategy, there is a ratio of risk versus return.
Same as other investments, Forex has also higher risk, but this risk can be managed.
Definitely, Forex trading is a good investment option nowadays. It is popular in the global marketplace only because of its uniqueness.
There are so many investment options where people can invest their money.
Here is the list:
- Mutual Fund
- Cryptocurrency, Bitcoin
- Real State
- Stock Market and so on.
The following phase will help you to know the differences between all the investment options.
Forex VS Blue Chips
Here, the Forex exchange market is the world’s largest financial market.
A blue chip is a stock in a corporation with a national reputation for quality, reliability, and the ability to operate profitably in good times and bad.
Many traders are attracted by the Forex marketplace only for their high liquidity.
In Blue chip stock, investors are able to make a profit during challenging economic condition. A blue chip is also paying a dividend.
Blue chip stock is considered less volatile than Forex. Forex trading hour is extensive than Blue chip stock.
The trading hour for stocks is limited whereas Forex trading hours are flexible.
Forex VS Cryptocurrency
Forex and Cryptocurrency can be traded in the same way.
Cryptocurrency has more volatility depending on the various nature of the market. You can trade Forex in multiple platforms.
Crypto coin is still developing. Forex is the most established and easy to understand.
Before Cryptocurrency came to the trading market, Forex was in pure traders market.
Now confused!! Which one is to Trade?
Both are presenting a great opportunity in the trading marketplace.
Forex VS Real Estate:
Investing in real estate was famous for investing business.
It is as simple as putting down payment to buy own property. You can sell this property at a high price in the Future market.
Here, the Forex market investment criteria are totally different. In the currency market, traders earn a profit by trading currency pairs.
There are no physical and tangible commodities being purchased in Fore trading.
Investing in the Forex is a quick operation rather than the real estate market.
In the point of taking leverage, traders take advantages from brokers.
Investors will seek financing from Bank, Credit Union, Private Lender or Investment Group in the real estate investment.
Forex VS Mutual Funds
In the Forex marketplace, you have to get updated from time to time.
You can also put stop-loss if you don’t want to sit in front of the Forex platform’s window. In mutual funds, there is a low cost of entry.
People who have not enough time or not enough knowledge about an investment or who have zero patience to manage investment are investing in Mutual Funds.
Forex VS Binary Options
A binary options trading is simpler than Forex trading.
There is no variability in options trading. Both are tradable in online.
The difference between Forex and Binary options is that in binary options the risk and profit both are fixed.
We mentioned before, in Forex, your reward is high as your risk is also high.
In the Binary option, your risk is higher than your reward. The time frame is also limited in Binary options whereas, in Forex trading time is flexible.
Both will give you profit potentiality. In Binary, you will know your risk and in Forex, the risk is unknown for market volatility. Now Decision is yours Where to Invest.
Why Forex Traders Fail
Traders fail very often for their common mistakes. However, they overcome again and start trading in full force.
But why do we fail?
We already discussed the answer by giving different points above.
Let’s have a recap:
- Low startup Capital
- Failure to manage risk
- Trying to pick tops or bottoms.
- Refuses loses
Powerful Trading Tips For Traders
Trading tips are quick and tricky. It will help you to trade well in the trading market. Moreover, any types of traders can follow trading tips to overcome difficulties.
We are going to share some tips for you. Please bookmark these tips and follow them before placing an order.
- Avoid trading when the market is too volatile, or lack of liquidity.
- You should never sell a dull market in a Bull market and a Bear market, you should never buy a dull market.
- Set your mind before trading.
- Never stop learning; no matter how experienced you are.
- Flexibility is an essential element of successful day trading.
- Do not rely on another’s opinion.
- Overconfidence is bad for Forex trading.
- Do not think about the return; focus on strategy.
- Be honest with yourself.
- Become a better trader by investing a small
There are no set rules for being an excellent trader. These tips will help you to trade well in the trading marketplace.
In conclusion, keep this in your mind that, no one is a bad trader. Following the above tips will help you to win a successful move.
Market liquidity is the greatest advantage of Forex trading. FX trading is free from paper works and commission payments, which we consider as difficulties associated with other forms of trading.
However, Forex is highly a technical market. With a little time and effort, you can acquire enough knowledge about the Forex trading marketplace.
Why are you waiting for? Trade Forex.