Forex is more popular than ever. Let’s take a look at the average daily turnover in the Forex markets over the past 20 years. $3.2 TRILLION a day in 2007, with no signs of slowing down. This spells opportunity for you as a Forex trader, and this is one of the best times I can recall to learn to trade and to start trading the enormously popular and potentially profitable Forex markets.
Why? Most of the major Forex pairs have been consolidating in a sideways, nontrending fashion for several weeks now, which is setting the stage for potential mega-trend breakouts which can create significant trading opportunities. The problem, though, is that too many traders aren’t sure how to take advantage of those opportunities, or how to spot those trades they could be making. As of this writing, the U.S. Dollar remains weak against most major currencies, and the continued economic fallout from the recent housing, banking and credit crises, continued weak growth of the economy, and the risk of continued inflation hasmade a dollar rally tough to sustain. But as those problems lessen, the dollar will strengthen at some point and someone will be riding a long run of hundreds, or even thousands of pips when it does.
Why? Because the difficulties with the U.S. economy along with the record high prices of oil are beginning to strain other economies. Europe and Asia now face similar inflationary fears as in the U.S. and a report from established central banks expects continued pressures on currencies as economies around the globe suffer.
Economists and other media gurus are predicting that the global economic pressures of high oil prices, inflation, weak growth (and even possibly recession)
could continue into 2009. At first glance, you might take such gloomy reporting and ask, “Why would I want to trade in this market?”
Here’s why: Those economic difficulties around the world create trading
opportunities almost daily. And, as I said before, the sideways trending of currency pairs means sooner or later, those pairs are going to break out and run (up OR down, either way gives you some huge profit potential). Which means this is the best time to begin trading Forex because you could have the opportunity to
catch a huge run. This is also the best time to LEARN to trade Forex because you can take your trading method as you learn it and apply it to the markets to watch those breakouts happen. Plus, you’ll be able to get a real hands-on experience understanding how those breakouts form, where you would enter and exit the market and how you would protect yourself with proper risk management. So, if you’ve been sitting on the sidelines waiting to trade Forex, I think now is one of the best times to begin or to learn to trade Forex because many of the “surprises” of last year are now behind us and are already factored into the market.
The Forex markets are creating trading opportunities right now. If you’ve been missing those market-moving opportunities, don’t miss another one. I think it’s important to say, though, that as Forex trading continues to gain popularity one of the underlying problems you may face is the idea that you must trade Forex ‘to-the-minute’ (or day trade) – this drives you out of the picture if you can’t commit that kind of time, and it creates inevitable losses if you’re illprepared
for the demands of day trading. I believe this talk about having to day trade Forex is wrong; that it is, in part, driven by brokers, who earn the difference in the spread on every trade, and who would naturally want the constant flow of spread profits.
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