Traders like Forex market for various reasons. There are no heavy fees, the charges are very low and moreover, you can trade the market for every day. There is no seasonal holiday in the trading the market and you can trade the market with your heart’s content. There are also many currencies which mean you are free to trade the market with your beloved currency. Many traders fall into Forex market by seeing all of these luxury things of the financial market and do not know if there are any sunk costs in Forex. In our article, we are going to tell you one very important thing that if there is any cost that you cannot recover when you invest in Forex. This market is not very friendly and traders find themselves in many scenarios where they have to quit Forex trading. Though most of the novice traders might think that small amount fees or sunk cost is not a big deal but the professional traders in Australia consider every single dollar as their valuable investment. So you should also know all the details costing of your Forex trading career.
What is sunk costs?
First of all, we have to know what sunk costs are. Sunk costs are expenditures that you cannot recover when you have invested. For example, you are in kids play zone and your child wants to buy a toy gun. You do not want to give that gun to him as it is very expensive. However, you give some money to the seller to keep the toy for your child and you convinced your child that you will buy him the gun and for that, you went home for more money. In the meantime, your child has changed his mind and now he is crying for the new robot. When you go back to the shop, the seller is not giving you the money. He is saying that this is the cost because he could not sell this toy to the other customers which you have no idea is true or false. This is the sunken cost of your child expensive toy gun that you have spent but you cannot recover. If you do not understand the example think of the money that you have given to your taxi driver when you just travel from one block to another if the distance is really small. The real question is, are there sunken costs too in Forex?
Forex does have some sunken costs
In CFD trading, you have to deal with some sunken costs. For example, the money and time that you have spent in Forex industry to understand the market movement and reading online resources, you cannot get them back. They are on the sunken costs list and you will make the lists longer the more time you spent. Also, the money that you have invested, there is no way you can withdraw the full amount of money when you quit. The broker will keep some of the money as your fees and also if you want to take your bonus, it will also have some additional fees. But if your investment money on Forex education than we will say that you are smart. But most of the traders start investing money in Forex education after losing a huge amount of money. Before you start your trading career with real money make sure that you have developed a solid trading system by using the demo account.
Summary: the Trading industry is very risky. A single mistake can wipe your entire trading account and you can never recover it. If you are not determined to become a full-time trader than never invest in Forex. But if you have strong passion than making some smart investment so that you don’t have to lose money in real life trading.