Wednesday March 18, 2020 - 13:29:07 GMT
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Why do people start trading in the first place?
Today, trading is widely associated with stocks, big numbers and enormous profits. Well, that is true, but only partly. We, often without noticing it, are engaged in the trade of different sorts on a daily basis. Going to a shop and buying groceries or purchasing other products or services are all classified as a means of trade. Not everyone realizes but we are a part of the bigger, global economy for which the concept of trade is a crucial backbone.
Obviously, despite the fact that trade occurs in different industries and comes in different types, we are here to discuss one particular type. We are talking about buying and selling financial instruments, such as stocks, commodities, bonds, currencies or mutual funds by different methods. The majority of such transactions are conducted through international markets, located in some of the major financial capitals of the world. More notable ones are the London stock exchange, New York and Tokyo. With the late development of emerging economies across Asia, markets in China, India and Thailand are also starting to gain momentum in the global arena.
To understand why people devote their entire lives to this industry and why is it so profitable, we should dive into the history of how the financial industry emerged. Currencies, as we know them today, were not always a thing. At the early stage of human development, communities were too small and underdeveloped for having such a comprehensive financial tool. Moreover, the culture of trading with goods as services among communities was not widespread either. People back then were much more likely to hunt and use violence to get what they wanted.
However, as communities grew and turned into towns and later into kingdoms, the need to trade became visible. At first, trade occurred by exchanging labor and goods for the other desired ones. The need was still not huge for the concept of currency and communities were managing well. Later, as hierarchies were established and trading relations became more important for communities, the need for a universal payment method became apparent.
Well, when we say a universal payment method today, most of us imagine e-banking or a digital payment service which can easily transfer a big sum of money across the world in just a matter of seconds. However, at that point, the universal currency was represented in the form of gold or silver coins. Precious metals were of utmost importance as they outlined the value of money - a novel concept.
Soon money became widespread as nations and communities around the world started introducing their own currencies. As a result, the need for them to be made from precious metals disappeared. Coins were later joined by paper banknotes, which further contributed to the wider adaption of money.
The introduction of paper banknotes would not be the end of its development. As companies became bigger with larger values and assets, the concept of stocks also emerged. Now businesses could issue and sell stocks and for this purpose, the international stock market emerged. The first official and formal stock market was established in Amsterdam, the Netherlands in 1653. It was followed by other major stock exchanges later established in London, New York and Tokyo. They still are the backbone of the global financial industry, serving as the platform for trading some of the most valuable assets in the world.
The breakthrough in the industry was sparked by the recent technological development. The increased access to the internet and hardware technology needed to utilize it pushed many to think out of the box. As a result, trading platforms emerged online, moving gigantic financial operations onto the internet. For this very reason, more people than ever before have a possibility to engage themselves in the industry. It has grown so much in recent years, that some brokers are not guaranteeing a profit in precise amounts. Offers like XM deposit bonus are also widespread along with other types of promotional conditions.
Besides the ability to trade online, payment methods have also had a major impact on the development of online trading. People around the world can not use digital fintech services to transfer money within seconds internationally. Thus, the environment for trading is rather good. But still, what makes people start trading?
The opportunity to make money
In general, the majority of people put effort into what they do to make money. Money pretty much is the biggest incentive for us to work. However, for many traders, the industry is not the main employer. As the accessibility increased, more and more people started using Forex as the means of additional income.
For many, the paycheck to paycheck life is not the best option as they have more needs. As a result, people use their small or bigger savings, start trading and make a profit out of it. The best thing about Forex is that there is no need for the gigantic amount to enter the market. The threshold usually is rather low, thus everyone can start off trading from home!
An increasing number of people say that trading changed their lives. They managed to make much more out of it than hey ever expected. Some only wanted to see a little profit to buy a new car or cover the wedding costs. However, the majority continued trading after making enough to afford what they initially intended to purchase.
To use the already-existing funds
Many people, particularly in developed countries have major savings that are not being actively used. There is a widely-known saying “money must work”, which pretty much means that the amount one holds should not be just put aside. Besides missing the potential to make more out of it, money might also lose its value over time. Thus, an increasing number of people invest parts of their funds in Forex, trying to make them ‘work’. It has helped millions to increase their money by simply using the amount they already have.
Should I start trading as well?
That is completely up to you! Trading is easy to start, quite simple and can be immensely profitable. Moreover, unlike decades ago, the global web is full of tutorials and material that will help anyone who wants to start trading. However, everyone should be aware that there is no guarantee of success. Although many succeed, some still struggle to make a profit.
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