Foreign exchange or Forex plays a vital role in the global economy—it shows traders and merchants in different parts of the world the market value of different currencies and allows them to evaluate the costs of different international commodities.
But for many, Forex is a way to make profits. People have made billions trading foreign currencies—and even in the face of all the changes that this decade has started with, forex trading is likely to stay as a way to earn for many. That said, 2022 comes with its own mix of disruptions for the forex market. Here are 3 things to consider if you’re getting into forex trading in 2022.
It takes a lot of work to understand the Forex market. There are a lot of factors that can help predict the future of the market and many other factors that, although they seem important, aren’t. As a beginner, it’s always a good idea to follow Forex Signals of other experienced traders. This will allow you to start earning profits right away as you learn how the market works.
Renown Forex Trader and 18-year-old prodigy Devin Sran is a perfect example of this. He started forex trading from a very young age but now gives his own signals. Solely from trading, he has generated thousands of followers. He currently has 387k followers on his Instagram (@devinsran).
Since the creation of the first bitcoin on 3th Jan 2009, the popularity of Blockchain and Cryptocurrencies has experienced an exponential increase. This increase has only been accelerated further by the recent hype around Bitcoin, NFTs, and the Metaverse. Indeed, many people who initially bought Bitcoin have earned profits one could never hope to earn in Forex by investing such small volumes.
So does that make Forex trading obsolete in 2022? Well, not so fast. Although cryptocurrencies have generated considerable hype around them, most international companies still trade in conventional state-issued currencies. These companies have economic incentives to exchange currencies.
A macroeconomist would tell you that this makes Forex critically different from Bitcoin. Forex adds value to the economy, and more people make profits in Forex than lose money. A cryptocurrency market, on the other hand, is primarily only occupied by people whose sole motive is to make profits. Without any economic value, there can’t be any net gains. This means that net profits earned by people in the crypto market are nearly the same as the net losses faced by other people.
You can use Bitcoin or Ethereum as a savings account, however, but Forex is a much better space to trade.
The difficult (or fun, depending on the person) part of becoming a forex trader is that you have to follow global news. The value of any particular currency depends not only on events in the county but also on events in other countries.
But as Yuval Noah Harari puts it,
“Today, having power means knowing what to ignore.”
From the sea of information posted on the internet, you have to figure out yourself what information is relevant for Forex and what isn’t. This is a skill that will take time for you to develop.