The Forex market is the place where most of the successful trading career begin and there are several reasons why that happens. It’s important to know from the start that there is no miraculous thing about this market, but instead, Forex trading is helpful when it comes to developing a series of trading skills that are crucial in the long run.
#1 Trading in a liquid environment
With more than $5 trillion in daily volume, the Forex market is by far the most liquid market in the world. As a result, you’ll easily notice that prices tend to fluctuate in narrow ranges. With only a limited number of situations when the market gets wild, it will be much easier to learn how to trade, without being hijacked by unexpected volatility. If you’ve already set your forex trading goals and in the long run would like to diversify with stocks, low liquidity and high volatility will be your main challenges.
#2 Learning how the market functions
Forex trading is the activity that teaches you the basics of the financial markets and how they operate. The banking system, monetary policy, the brokerage industry, the impact of economic events on currencies, and the basic function of supply and demand, are only a few things that you can learn along the way. It will be very helpful not just for your trading performance, but for your daily life. Most people lack financial education and with that respect, you will have a big edge. If you can be diligent enough to stay focused on the learning process, then learning how to trade forex will be a great asset.
#3 Understanding money
If you were to randomly ask people on the street “what is money?”, “what gives value to money”, “why we have floating exchange rates?”, silence will settle. That’s a big problem, especially since money now plays such an important role in our life. As Robert Kyosaki claims many times, your teachers don’t teach you anything useful about money and that leads you to make plenty of bad decisions.
That’s not the case when you start to learn forex trading. Even though you’re at the beginning, the simple act of you studying and learning new things will put you in advantage against other people, from a competitive point of view. Accumulating knowledge is the most important thing in the early stages, so don’t lose motivation in case returns are not yet showing.