Why Do People Trade?

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We are so used to the fact that we are in a cycle of trade relations that we do not even notice it. Every day we go to shops, buy food, clothes, gadgets and consider these actions as an inescapable part of our daily life. Dead right!

The reasons why do people trade

History tells us that society has been actively developing since the exchange of material goods and services. In the course of the process, the predecessors of money appeared, and now the majority of transactions are conducted using currencies – national and world ones.

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Today, the currency is not only the way of payment for commodities. The currency itself has become a commodity that can be traded.

Why People Trade

Due to the constant need for the exchange of foreign currencies, a unified telecommunications network has been formed. This network allows millions of currency sellers and buyers to make exchange transactions around the clock from anywhere on the globe.

The set of currency conversion operations on a global scale is called the Foreign Exchange Market. Currently, anyone can be a trader on Forex. You may start a career of a currency trader at any age, herewith education and previous work experience are irrelevant. The number of traders is growing every day. There are several reasons why people trade currency.

1st reason why do people trade – to make money

The purpose of the trading is to get something in exchange – the commodities or money. In our case, we trade to get more money from this.

Many people do not have enough of their earnings at work, so they are trying to find an additional income. Forex is perfect for this. All you need is a little effort to get into the swing of the work and to make a small money deposit.

People always need money, cause money is never too much. But everyone has different goals for using the earned money. Someone wants to buy a MacBook, someone is saving up for a wedding, someone is dreaming of building a house.

A friend of mine dreamed of opening his own tea shop. And trading helped him a lot in this business. My dream, for example, is to buy the Tesla Model S and make a round-the-world trip with my family.

2nd reason why do people trade – to wake up rich

Surely you watched movies and read stories about how people become rich in one day. A striking example is George Soros, who earned more than a billion dollars in the financial market in one day. And of course, people always seek easy money.

George Soros
George Soros

But remember that there are few men of his timber. Forex is not a place to defy luck.

3rd reason why do people trade – money must work

In any book on learning business or success, you are sure to find a tip “Invest 10% / 20% / 30% of your funds.” And this is good advice since money must work. Businessmen and successful people often use this rule: someone invests in securities, someone – in stocks, another one – in profitable start-ups. Many people invest part of their earned money, i.e. they save up, for example, 15% of their salary, and invest or trade them.

Note! Invest in Forex as much as you can afford to lose. Do not deposit all the money that you have. After all, Forex is a risky method of earning. Remember that if not to meet the risk management rules, you can lose everything in the blink of an eye.

4th reason why do people trade – Forex as a game

Many people regard trading on the Forex market as a gamble. In many countries, poker, sports betting and any other types of gambling are banned, so people are looking for similar emotions on Forex. They believe that everything here depends on luck as well. “Playing” on Forex, counting only on luck, one can really feel the same adrenaline and excitement. Well… This is their business.

Why Do People Trade?

However, if you treat trading wisely, learn to analyze, then you can succeed in it.

5th reason why do people trade – it is really interesting

Forex trading is very exciting. It is not necessary to trade to earn huge fortunes. Many people do it just for fun. For example, I’m extremely interested in understanding technical analysis, delving the platform settings, learning new indicators and applying them.

Analyzing data on the market, watching the news, you develop your thinking abilities and broaden your horizons. So the Forex market is also an engrossing hobby.

Advantages of trading on Forex

Trading in the Forex market can also be treated as your own small business, which has a number of advantages:

  1. Round-the-clock earnings. You can make transactions on Forex 24 hours a day. This is possible because its trading floors are located around the world in different time zones. Trading ends only on weekends.
  2. The market is not tied to a specific place. Forex has no physical location. Transactions on it are made using computer terminal programs. You can sell and buy currency with their help from anywhere on Earth if you have an access to the Internet.
  3. Marginal trading. A small starting capital allows you to make transactions for amounts that are many times (in tens or hundreds of times) exceeding it. Trade is conducted without real delivery of currencies, which reduces overhead costs.
  4. High liquidity. The volume of Forex trading is 1.5 trillion dollars per day, which is more than 50 times the daily turnover of the famous NYSE. High liquidity means that there is always a sufficient number of buyers and sellers on the market, i.e. there are no difficulties with opening and closing positions – a trader can always get a quotation with a minimum spread.
  5. High dynamism. On the Forex market, you can quickly make a profit – in several hours, and sometimes even minutes. Forex trading is always carried out in real time. In our dynamic time full of crises, long-term investments are not relevant – they do not correspond to the modern lifestyle.

So, as you can see, Forex is convenient for trading and profit making. However, everyone pursues his own specific goals. I want to ask you once again to always keep in mind the risks that the market entails. Treat the trade seriously and with care.

I wish you good luck in trading!

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