How Forex can help you being financial free FASTER!
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I always heard that people want to achieve financial freedom or being rich as fast as they can. Maybe they are totally fed up with their current life and can not stand at their current condition anymore. Yes you can achieve financial freedom if you are using a right way. Today I'm going to share with you what is Forex and how you can leverage on it to be financial free FASTER!
The Foreign Exchange, also called as “Forex" or “FX", is a market where currencies are traded. Forex market is the biggest liquid financial market with an average traded value around $1.5 trillion per day. It is hard to determine an exact number. Forex market is open 24 hours a day, 5 days a week - 00:00GMT on Monday to 22:00GMT on Friday. In forex market, the currencies are being traded among the major financial centers in London, New York, Tokyo, Frankfurt, Hong kong, Singapore, China, Paris and Sydney. Different country have different time zone and this is why forex market is open 24hours.
Benefits Of Forex in achieving Financial Freedom
In year 2004-2005, I involved in Forex trading. I'm not really involved since I just trade using demo account. I really gained a lot of trading experience at that time and I found that forex can help us become financial free Faster because of certain “features" on Forex that we can not found in other investment. Below is the list:
- Leverage, 1:100 - 1:400 Forex can let us leverage on our money. For example, if the rate is 1:100, for every dollar you invest, you can get the effect of investing $100 or more. What does this means to you? First you can invest in forex with a small amount of capital and everyone can invest in forex without any big capital. Second you can leverage on forex and increase your capital faster. If you read my post Cash flow & Capital Gain, 2 points that you must focus to achieve financial freedom then you will understand how important capital gain in achieving financial freedom.
- Trading Time Forex market is open 24 hours a day, five day a week, with currencies trading around the world in major financial centers in London, New York, Tokyo, Frankfurt, Hong Kong, Singapore, China and Sydney. This is an advantage for you because you have a longer trading time in forex than other investment. However it is not advisable to trade 24 hours, 5 days a week. You must learn to select certain time frame and invest long term or short term. From my experience, the more hours you trade, the chances that you will loss money is higher due to your emotion. The price of currencies are changed in a “up and down mode". The longer you follow the price changes; you will start afraid of losing money and make a lot of wrong trading and ends up losing money.
- High Liquidity Forex market is a high liquidity market. It means you can invest and take out your money from forex market very easy. For example, a part of my plan to financial freedom is investing in forex market for capital gaining, then I take out the money from it and go for Real estate and business investment to get passive income. First I leverage on forex to increase my capital, then at the same time I search for profitable real estate or business, since forex market is high liquidity, I can take out my money from forex and invest in real estate and business that I found is a good deal.
- Small initial investment Because of its “leverage" feature, you actually don't need a lot of money to start trading in forex. If you go through the major forex trading company, you will found that with as little as $500, you can start trading in forex and earn money. However, I don't recommend this. From my experience, the more money to invest, the lower risk you can loss your money. It is ok if you don't understand what happen here, but I will make a more detail explanation later in my future post.
- Flexible Settlements Foreign Exchange can be tailored to specific investment objectives. Investors may choose from different trade strategies based on financial goals and needs, whether it is aggressive, conservative, long-term or short. From my experience, I make more money if I invest in long-term, for example, hold a position for more than 3 days or 1 weeks. Of course, if condition approves, I also invest short term and become a day trader. However, the risk is high and I don't make as much as money in longterm.
- Analyze a Nation like a Corporation Currencies are always traded in pairs - one currency is purchased with holdings in another. As with stocks, better FX returns are provided by the currency of a country that demonstrates faster growth and is in a better economic condition that others. So to me it is more easy to research in forex market.
Conclusion
Foreign Exchange market trading is a fast growing field that offers some significant advantages over other investment methods. However many people are reluctant to involved simply because they lack the necessary knowledge. But once you get used of it, forex really a great investment tools to implement in your financial freedom plans especially in capital gaining section.
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