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What do you think of having aside incomes of a couple of thousand a month? You can keep your day job and still make that much as a side income. Forex trading is a business that is unlike any other business in the world. In fact if you look close and hard, there is no other business model that allows you to work for so little and yet make so much! But for the folks that think Forex trading is easy, think again. Here are 3 reasons on why trading forex makes you rich.

1. It is the world’s largest and most liquid market. As of writing, the Forex market trades at 3.3 trillion a day in volume. Now compare that to the stock exchanges in the world. If you add all the exchanges together you might just get that sum. But trading in the stocks market means that your turn over time is longer which translates to lesser profits. While Forex trading as it is so liquid ensures that a trader can happily transact and profit on the spot.

2. Immediate execution of orders. The forex market is traded on spot most of the time. That means you buy and sell on the spot. There is no waiting time for your orders to get filled. Compare that to stocks, you might have to wait hours at times to get a person to take your orders. If the stock market is doing poorly there might be a case whereby your orders do not get filled. So you are essentially stuck with a useless piece of paper. Not so for forex and that translates to faster and immediate profits (or losses).

3. Leverage. While the concept of leverage is usually poorly understood by many. It is a great advantage for many traders in Forex. You get to borrow money from the broker to trade and should you win, the profits are yours. Of course should you lose you will have to pay. Now for any business person looking to take a loan from the bank to start up a business. Doesn’t the above example sound familiar. You borrow money from the bank to start a business and should you make money the profits are yours. But should you lose, well the money has to be paid back anyhow! Leverage enables a trader to take positions that are usually out of reach. This gives trader more room to play with and that means more profits.

While it is not easy to make profits in forex it is also not a difficult thing to do. To be able to make consistent profits in forex a person needs to first understand the psychology of trading, have good money management and finally have a basic trading plan. These are the essentials that will give a trader the opportunity to make profits far above any normal business owner.

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Source by Joshua Geralds