I had a discussion recently with one of my newsletter subscribers. He brought up the topic of forex and made the inquiry “isn't that mainly a professional market?", which is something I've heard a great many times.
Certainly forex used to be pretty much exclusively the domain of the pros. It was very difficult for the individual trader to play that market. Starting in the late 1990s, though, that began to change. Individual trading accounts become more readily available. Since then there has been an explosion in forex brokers
The great thing about that development is its impact on part-time traders. Forex is a fantastic part-time trading market. It operates 24-hours, so one can trade at any time of day or night. That literally means you can “day trade” at any time of day, if such is your interest. You aren’t redistricted to standard daytime market hours, which don’t work for many people.
There are low account minimum sizes available in so-called retail forex trading, and even a no minimum account in at least one case. There are also low (or no) minimum transaction sizes available. Plus, there are mostly no commissions (or at least only very small ones) for forex trading.
I actually consider forex trading to be much easier to manage for the part-time trader than the stock market. Think about how many stocks there are available to trade. It's a huge amount. In forex there are fewer legitimate tradable “instruments", though they provide at least as much opportunity for trading part-time.
Furthermore, forex trading can be a lot less demanding in terms of the analysis required to make trading decisions. Part-time trading, after all, is about managing the trade decision-making process as quickly and efficiently as possible. That's something more easily done in forex than in some other markets, like stocks.
So don’t let anyone tell you that forex trading is only for the pros. If you have an interest in trading the comparative rates of exchange between the world’s currencies, there are plenty of opportunities for you to do that. You don’t need to have millions in your account.
John Forman is author of The Essentials of Trading (Wiley - April 2006), and a near 20 year veteran of trading and analyzing the markets. For more information on forex trading, check out John's free forex guide which will answer your questions about the currency market.