Yes! Recession is a time when the economy experience a downsize and to be honest, it looks terrifying to businesses but not for forex trade. Though there are traders like large institutions and banks who may want to trade carefully during this period, there are other players who are seizing the opportunity to trade more.
Investors delight so much in forex trading due to its benefits. A trader's ability to take a risk, the investment objectives and the level of experience are all that's required to trade effectively. Forex trading has proven in the past and in the present to be a sustainable means of income for many households in the world. According to dailyforex.com, many households in America earn a substantial amount of money from forex trading to support their financial needs.
While other forms of investment may be badly affected by the recession, smart forex traders enjoy it. For instance, the trend traders trade base on the prevailing market trend, whether bullish (when prices are trending upwards) or bearish (when prices are trending down), or fairly stable market where prices are insignificantly moving up or down. This concept of trading (trend trading) is the most effective to earn a passive income during recession. It is worthy to note that forex trading is different from gambling. A situation where a trader makes a million in trade and lose it in another is no longer trading but gambling. The ability to consistently make the same or similar profits with every trade makes you a good trader.
ADVANTAGES OF FOREX TRADING DURING RECESSION
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Forex trading has never been monopolized by any country or organization at any time. It is less influenced by any economic or political factor since it has one of the largest markets in the whole world. Furthermore, Its 24 hours operation gives inclusiveness to every country irrespective of their time zones.
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It's a usual thing that in recession, the purchasing power of individuals drops since they have little income coming in for them. However, forex trading can be done with a little amount of money, depending on the ability of such trader and be certain of returns on investment. Under normal circumstances, the forex market is very predictive since the market is liquid and with the right analysis, traders can get a better result.
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In forex trading, different currencies are traded and are done in pairs. This implies that traders can choose any currency that suits them best from their country of origin. More profits are earned once the currency they are trading against drop or increase in value, depending on the call made.
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With the availability of online forex trading facilities, people can trade anywhere they are, from home or office. The flexibility that this trade offer gives room to people, irrespective of their status and class to invest in it and still make the most out of it. Regular income earners who are bound by their organization oath not to have a side hustle can opt for this trade as long as it doesn't conflict with their work. The unemployed can also take advantage of this trade if they know its trick to earn income for themselves.
CHOOSING THE RIGHT FOREX BROKER
As juicy as forex trading seems, missing out on the regulated forex brokers to trade with can cause serious harm to the trader. While some brokers are suitable for all traders irrespective of their level of experience, some provide little or no support for its traders. To know which broker is right for you, you should consider the following about the prospective broker.
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Forex trading demands funding your account with some amount of cash with the least amount been $5. Irrespective of the amount of cash you put into your trading account, money is money. Hence, you must consider the authenticity of a prospective broker if it is certified or not. To check the authenticity of the prospective broker, visit the country's regulatory agencies of the originating broker as these agencies have separated the fraudulent ones from the trustworthy brokers. If the broker isn't a member of the country's regulatory body, don't trade with them.
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Another important factor to consider is the transaction costs incurred for trading with a broker. While transaction cost is unavoidable, you must research how much you'll be charged either for spread or a commission. The truth however is that you have to let go of low costs of transactions sometimes for a more reliable broker.
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It is important to have a prior knowledge of the pace of depositing and withdrawing from your trading account. A good broker ensures that funding and withdrawing come with no hassles. You may need money for an emergency and if withdrawing isn't smooth and speedy, you won't be happy.
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In choosing the right broker, ensure that the trading platform is stable, user friendly, and has the analysis tools that can help you trade efficiently.
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A good forex broker must also have a good customer service that responds to enquires swiftly. Traders at one point or the other may encounter challenges and need urgent attention from the brokers. Look out for a broker with reliable and responsive customer service.
If you are considering the best forex brokers, the top five brokers shared by financebrokerage.com are Oinvest, ETFFinance, HFTrading, 101Investing, and FinMarket.