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Can Forex Trading Make You Rich in 2021?

Forex is a trading market that’s been around for a long time but is more accessible now than ever. Learn whether you can make a fortune from trading on it and how.
April 23, 2021
5 mins read

Here, you can explore the forex exchange market, how it works, and finally discover whether forex trading can bring you big profits and make you rich or not. The forex trading market, or the forex market, is a fully decentralized, over-the-counter market for currencies trading. Therefore, in the simplest terms, forex trading is the trading of different currencies from different countries.

Today, the forex exchange market is one of the biggest markets in the world, and the daily fluctuations on the market affect basically everything from the clothes you purchase in a local store to the price you pay for foods and drinks. It is very similar to the currency exchange market since a forex trader gets one currency, for instance, U.S .dollars, and sells it for another, such as Euros. The exchange rate fluctuates on a regular basis according to demand and supply.

All currencies are traded in an exchange market that is open 24 hours every day. Forex trading always takes place OTC, or over the counter. In other words, in forex trading, physical exchanges do not take place; moreover, the market is overseen and governed by international banks and other major financial institutions.

While the vast majority of forex traders are fund managers, big corporations and individuals who work for banks and other financial institutions, people from other businesses are also getting involved in the forex trading market. If you are looking for valuable strategies to trade forex, there are a bunch of online guides to help you. As lucrative as it is, the forex trading market has its pros and cons, but the main question is whether forex trading is worth your money or not.

How Forex Trading Works?

The forex exchange market is the largest market by trading volume, and it covers all aspects related to foreign currencies including selling, buying, and exchanging foreign currencies at current prices. On the market, currencies are always paired, and their relative value is always set according to their pairs’ relative value. All foreign currencies have their code with three letters, with the U.S. dollar leading the forex exchange market.

The Euro is the second most traded currency followed by the British pound, Japanese yen, Australian dollar, Swiss franc, Canadian dollar and New Zealand dollar. Forex trading always involves a combination of two foreign currencies that are being exchanged. The seven major currency pairs that account for around 75% of all forex trading on the forex trading market are:

  • EUR and USD
  • GBP and USD
  • USD and JPY
  • USD and CAD
  • AUD and USD
  • NZD and USD
  • USD and CHF

If we take the first currency pair with USD and EUR, the base currency is EUR, or the currency on the left, while the quote currency is USD, or the currency on the right. Regardless of foreign currency pairing, the exchange rate always tells you how much there is of the currency on the right, or the quote currency. In forex trading, the base currency is always assigned one unit while the opposing currency and its value fluctuates based on the current exchange market.

Can Forex Trading Bring Profits?

To answer the main question here, forex trading can bring huge profits and make you rich. However, regardless of which route you take and regardless of which forex trading strategies you employ, getting rich from forex trading takes time and more importantly, requires different skills and kinds of expertise. Forex trading does not provide a quick route to get rich, but skilled forex traders most certainly can make money, which is exactly why 7 out of 10 millennials these days are investors.

To generate any amount of significant income in the field, you have to educate yourself, do your own research, learn about the market’s benefits and potential pitfalls, go through different strategies, learn about current economic conditions, and finally, carefully watch your bankroll.

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