Why Are Forex Traders Rich – 2020 Tips

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Today, over 15 million people connect to financial markets over the internet. Leading platforms allow anyone to buy and sell currencies remotely. Traders around the world, including Nigeria, can boost returns through skill and attractive Forex bonus promotions. For persistent ones, getting rich is feasible. Here is why.

Currency pairs are just one dimension of online trading. Today, the range of digital instruments includes stocks, CFDs, binary options, etc. Reliable local brokers like FXTM allow Nigerians to register accounts and explore the vast opportunities. Most neophytes start with currency pairs as the least complicated option. It can be a life-changing event for those who can learn.

Overview of Opportunities

Forex traders achieve success based on their knowledge and foresight. Modern technical tools make decision-making much easier than decades ago. Thanks to the internet, all the necessary data is instantly available through the platform. Here are key factors accounting for high returns on investments.

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Manageable risks

Any form of investment carries inherent risks, the only difference is its scope. While you could let your money sit in a savings account, the interest can hardly even cover inflation.

Offers that promise unrealistic returns must be avoided. Forex trading, however, is a lawful opportunity to make money work. As long as you choose a licensed broker, monetary gains depend on your skill and knowledge.

There are different ways to hedge risks. First, handy features of trading platforms like “Stop Loss” and “Take Profit” enable automatic execution of trades at most favourable price levels. Secondly, traders have access to ample educational material. They conduct thorough analysis using:

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  • financial news,
  • dedicated calendars, and
  • multiple technical aids.

The platforms (e.g., MetaTrader 5) are packed with state-of-the-art tools. There are graphs, bar charts, tables, and other visuals that facilitate forecasting. Without this arsenal, keeping track of all market factors would be a challenge.

There are two major dimensions of analysis. Some market participants rely on news reports, focusing on economic and political factors affecting the rates. Others use technical analysis, looking at past market data to identify patterns. Both approaches can be used at the same time, and they are based on modern technical tools.

Copy Trading Opportunities

This is another way to limit risks while saving time and effort. Traders who lack experience, or have no time for the in-depth analysis, may delegate. They choose a strategy manager who is tasked with investing a portion of their funds. As part of copy trading schemes, all actions taken by the expert are replicated in your account (hence the name).

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Working from Home

The most popular trading environments (MetaTrader 4 and MetaTrader 5) can work on both desktop and mobile devices. The software is free for download from brokerage sites, and it is easy to install. Both Android and iOS versions have thousands of reviews in the respective app markets.

This means you can analyse trends and manage your positions on the go. With state-of-the-art tools, you can seize the perfect opportunity wherever you are. Forex market is open 24 hours a day, 5 days a week. Luckily, there is no need to sit at your computer all day.

Leverage

If you think large-volume trades require colossal deposits, you have not heard of leverage. This scheme allows you to open positions for more than you could afford. The broker provides a portion of their own funds to boost your purchasing power. Ratios can reach 1:2000, and they vary depending on the type of account and product.

The logic is always the same. Imagine that you are trading any instrument with leverage of 1:100. This way, opening a position for $100,000 requires only $1000 of your own money. This means that risks are limited to your contribution, while the returns could be immense. Naturally, higher possible gains bring higher risks, so the arrangement should be taken seriously. The profit potential is why so many traders use leverage.

Loyalty Programs

Brokers keep their members motivated through reward schemes. Not only can you monetize your knowledge of market trends, but you can also reap bonuses and move up the loyalty hierarchy. For instance, during limited-time offers, a cashback bonus can even be given for every trade.

 

Top 4 factors determining the general rate of return on your investment:

  1. The foremost factor in determining the rate of return is your objective. No matter where you invest, it would be wise to set a target for your investment. For instance, your goal can be to buy a property, funding for the child’s bright future, or maybe, you are planning for retirement. In the best interest of all, you must set your goals and make the necessary investment accordingly. These immediate or long-term goals will help to determine the decision-making for the investment and analyze the rate of return.
  2. The second thing that will help you analyze the rate of return will be the age factor, and financial properties bestowed on your shoulders. It is another best aspect that will help you make the right investment decisions. For instance, if you invest during a young age, it will yield more returns during the long-term and vice versa. The reason behind this will be lower financial responsibilities. It is always beneficial to understand the need to invest at an early age as it will help you gain more benefits during the future. Organizing the finances when you are young will increase the rate of return on your investments. So, you can set your goals at an early age and prepare to fulfill it sooner.
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  3. The third thing that will affect the rate of return will be the availability of funds. A person under debt will not see better results as compared to the individuals who are not debtors. Forex platform demands regular investments, and therefore, with your ongoing obligations, you might face issues and incur losses. Under such circumstances, even if you choose to make investments, you need to analyze how quickly you may need it. Long-term investments bring-out reasonable return rates. However, short-term investments might not give you much in the particular time from your old investments.
  4. Lastly, if you are a risk-taker, you can be the one to get the best rate of return from an investment. For example, at a younger age, you will have a higher risk-taking capacity, and therefore, it will be beneficial for you soon. During this time, you can go with the flow and swings that you will see in the stock market. Therefore, ‘higher risk higher returns’ policy is always the way to determine the return rate from an investment.

Three Top Names

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The most famous and richest Forex trader in the world is mentioned in any economic textbook. George Soros is one of the greatest investors ever. In 1992, he made history by gaining over 1 billion British pounds from short-selling. What followed was the infamous Black Wednesday. Today, his net worth is estimated to be around 8 billion US dollars.

The hall of fame also includes Stanley Druckenmiller, one of the best day traders. Today, his net worth is over $2 billion. The third star, Bill Lipschutz, made a hundred-million-dollar profit for years.

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