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Is Forex trading profitable? This is one of the first questions it new traders are people who want to be new traders ask about the Forex market. The answer to this question is both yes and no. The reason I say that is because Forex trading is profitable for those that have taken the time to develop the skills and discipline to trade Forex properly. The vast majority of traders do not ever get the opportunity to find out if Forex trading is profitable or not. This is typically due to a lack of skill as well as a lack of discipline.

The fact of the matter is that Forex trading is not only profitable, but can be the vehicle to creating wealth. Let me say before we go further that this will not be typical for all people who trade Forex. In other words not everyone is going to become wealthy.

There are a number of reasons a Forex trading can be extremely profitable. Market liquidity is one reason. Since the dollar volume of Forex trader daily is in the trillions of Forex market is extremely liquid. It is this liquidity that makes it easy to enter and exit trades. The main reason it for us trading can be so incredibly profitable is leverage. Leverage available in the Forex markets is typically 100 to 1, meaning that for every $1000 on deposit in your Forex brokerage account that youre able to control a Forex currency pair contract worth $100,000. What this means to you as a trader is that even small movements in the currency pair become magnified in terms of dollars because of the leverage involved. Keep in mind that leverage is a two-edged sword, meaning that it can work for you as well as against you.

If youre still wondering is Forex trading profitable after reading about the power of leverage is a simple example of a trade I was in the early 2011. I went long the EURUSD at 1.33615 and closed out my long position four months later at 1.43646. Now, while the difference between those two numbers doesnt seem to be very large they do translate into a sizable profit of roughly $10,000 per standard contract. This is just one profitable example there are many many more that have much larger per contract profits. I certainly hope this helps to answer your question, is Forex trading profitable?