Forgive my ignorace... Why is that many day traders trade Forex? I've never done any forex. What am I missing? Thanks NGN
High leverage and the fact that it only takes a couple grand to open an account. Profitability is probably not an issue, given how retail forex market is structured.
Thanks. so it must be somewhat 'preticatable' for people to make money doing it. or is it simply a technical anaylais play?
I dont day trade (more of a positional trader). I do agree that you need to constantly monitor the markets due to the 24 hour nature of it and sudden news and factors affecting it. FX seems to be the new "in" thing in trading. Probably due to the fact that accounts are easy to open and leverage is freeflowing. Most fail of course to feed the few.
You only asked why many are doing it, so I just gave a few reasons why forex is attractive to smaller traders. Whether they are making money doing it is a completely different question.
Great for people with insomnia from 2am to 9am. Make your money then get on with the rest of your day.
There are several reasons why Forex is so popular. One is that you can make 200 times as much money than trading stocks without more risk. In a typical Forex trading account your deposit controls 100-200 times the amount of your money that is deposited in the trade. Your risk is the number of PIPS in your stop loss. So you can trade with as little as $5.00 increments. Nevertheless, even if you trade with millions at a time Forex is superior. There are only 6 major currency pairs compared with thousands of stocks. Forex is much easier to trade than stocks or commodities. The market moves 120-150 PIPS per day on most currencies and a 50 PIP movement represents 100% return in a 200:1 account. Many of us are seeing at least that much every day with a couple of hours of trading. Forex is by far the most accelerated path to wealth in my opinion and I am most thankful for having discovered it. Starting with $1000 I was able to quit my job in real estate and put aside my real estate investing business and am making more money in one month than some of my former colleagues make all year. Most people are too negative and limited in their beleifs to recognize how incredible Forex is. But for those who do see the opportunity it is a wonderful gift.