THE RISE OF RETAIL FOREX

BY: Mario Sant Singh, Director of Market Development, FXPRIMUS

Mario-Singh
Mario Singh

With an average of $4.3 trillion exchanged per day, the Foreign Exchange (Forex) market is the largest and the most actively traded market in the world.

That extraordinary daily turnover, is equivalent to more than 12 times the average daily turnover of global equity markets, more than 50 times the average daily turnover of the NYSE, more than $500 a day for every man, woman, and child on earth, and represents an annual turnover more than 10 times world GDP, with the spot market accounting for over one-third of daily turnover.

I believe the key to spreading awareness about forex trading is through education. As investors acquire the knowledge, their interest on forex trading will naturally be piqued. Couple that with proper coaching and guidance during their learning phase, traders will come to realize the wealth potential of trading the forex market.

Retail forex trading has grown tremendously in the past decade. As the global economies faltered in the wake of the Global Financial Crisis, interest rose in investment in the forex market as people saw it as another avenue for portfolio diversification.

Thirty-seven percent of total turnover in Forex worldwide, are spot transactions – which are mostly traded by retail traders, who are everyday people like many of FXPRIMUS’ clients. Half of the US$1 trillion growth in Forex trading in the last period surveyed for the Bank of International Settlements (BIS) – from 2007-2010 – was in spot transactions, testifying to the spectacular popular growth of retail Forex trading worldwide in recent years.

In Asia particularly, investors flushed with liquidity are increasingly looking at the forex market as a viable means to leverage and grow their wealth. This is evident in the mushrooming of forex education providers in the region.

Society is also getting more tech-savvy, with more people using smartphones like the Blackberry and iPhone. These two factors alone have given rise to a tremendous interest in online Forex trading. Today, you can access the trading platform on the laptop and virtually any smartphone.

Unprecedented Liquidity and Sovereign Debt Levels
More than anything else, the Forex market is a trader’s market. It’s a market that’s open around the clock six days a week, enabling traders to act on news and events as they happen. It’s a market where half-billion-dollar trades can be executed in a matter of seconds and may not even move prices noticeably.

With a potent combination of unprecedented liquidity and sovereign debt levels in the world today, the world of Forex is also in a constant state of flux.

Not only does it inherently fluctuate in response to outside factors, but new regulations, new tools and technologies, as well as new trade strategies, are constantly revolutionising the industry. A good trader will have a handle on all of these factors and be able to use them in his or her favour because smart and successful trading is not all about tools and gadgets, but about a deeper understanding of the industry and the markets.

An Australia-based retail Forex trader became the world’s top-performing retail FX Trader in October 2012 in terms of percentage return on initial investment, by earning a 4,186.00% return on investment in 30 days, exceeding the returns of 2,523 traders in 26 countries who participated in a worldwide online trading contest run by FXPRIMUS. From an average deposit of $2,114.55, the top 20 traders in the firm’s contest achieved average returns of 506.7%.

Such a result is possible – although not typical – in trading the Forex Market, where a trader can go Long or Short at any time –giving maximum flexibility to ride an ongoing trend or to cut losses fast and take advantage of a change in market direction.

‘Win Big or Lose Big’

The assumption for many is that Forex is a market to “win big or lose big.”

However, this is not true. While leverage allows you to make large profits from a relatively small initial investment, proper risk management helps traders protect their downside. Great traders never risk more than 3% of their capital per trade. Once retail traders practice this rule, they can literally have their cake and eat it – be in a position to amplify gains and limit losses.

The benchmark for a trader is to be consistently profitable. If a trader makes a 6% return on capital every month, that’s a 100% return in a year with compound interest – a realistic and achievable return.

As investors acquire knowledge, their interest in Forex trading will naturally be piqued. Couple that with proper coaching and guidance during their learning phase, and traders come to realise the wealth potential of trading the forex market.

Taking the high public interest of Forex trading into account, I believe that it is crucial to equip and expose investors with proper education, based on 3 keys to profitable forex trading:

A. Strategies
Retail traders must have a proven set of rules to tell them when to enter, when to exit and when to stay out of the market.

B. Money Management
Retail traders must practice strict money management by controlling their risk for every single trade. Great traders do not risk more than 3% of their capital per trade. This prevents them from blowing up their capital in a short period of time when they experience a string of losses.

C. State Of Mind
Retail traders must be disciplined and not let emotions rule them when it comes to trading. In order to do so, one of the most effective ways is to have a trading plan and follow it diligently.

Mentoring and Coaching the Way Forward

I also strongly believe that mentoring and coaching are the best ways for retail traders to learn how to trade successfully. If they learn from another successful trader who has already walked the path that they are seeking, it will greatly shorten their learning curve.

Because less experienced and beginner traders are just as important to FXPRIMUS as money managers and white label partners, we offer retail traders world-class education with unparalleled content in terms of tutorial videos and 1-on-1 coaching for clients at all levels, as we want our clients to succeed. All traders who open and fund a live account receive 60 days free access to FXPRIMUS Coach, conducted by FXPRIMUS Training & Education division’s team of professional coaches.

Even new Forex traders get a level of trade execution, training and education, service quality and fund safety that are normally reserved only for large, sophisticated investors. FXPRIMUS Coach is a revolutionary service, in that it allows clients who sign up for it to receive access to an exclusive live 1-on-1 chat service where they can ask and receive trading advice or inquire about specific technical indicators. They can even ask about how certain economic events will impact the markets. The tool has already proven invaluable to beginners looking to break into Forex markets.

New traders can open a free 60-day practice account and practice with virtual money using live streaming buy and sell rates. During the 60 days, new traders receive free new trader coaching, video training for beginners and more from our professional coaching team.

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