One of the greatest perks of trading forex is its flexibility: you can do it anywhere and anytime, whether that’s on your lunch break at 12pm or curled up on the sofa watching the soaps in the evening.
However, it doesn’t just have to be a hobby. Most of us think of the financial markets in terms of an investment. If we sink capital into the venture, we see it as money put aside for the future, managed by someone far more able than us.
But what about trading forex for a living? For the stay-at-home mum or the self-employed businessman, it’s not an impossible proposition…
The Perfect Home Business
If you take the time to think about it, forex could offer a viable employment solution. As with any self-employed venture, it puts you in control of your own finances, and if you have the skill to be successful, this could really pay off.
It has the added benefit of incredibly low overheads. Admittedly, starting up means purchasing a computer and paying out for the internet, but most of us already have these luxuries installed in our homes. Additionally, there are no employees to pay, no office costs and nothing to store. There are websites out there who can make the whole process easy.
Many people, however, are discouraged by their perception of how the market works, which is largely based on how we see traders depicted in the media. The image that’s created harks back to the early era of day trading, around the 1980s, when real-time market feeds were prohibitively expensive to access. This makes it seem like the small fry home trader would be at a severe disadvantage; rest assured, this is no longer the case. If you choose your broker wisely, your software platform will provide a direct connection to the markets at no charge, which will give you access to all of the data that the major traders have. It would make little sense for savvy brokers to do otherwise; after all, they get commission from each trade you place, which means it pays for you to be successful.
Why Choose Forex?
There are three major traits of forex that make it superior to other markets for those who have a lot invested and a lot to lose i.e. home traders.
The first of these is leverage. Forex brokers tend to offer much greater leverage for individual traders than other financial markets. Whereas leverage of 50:1 is not uncommon in the currency market, most stockbrokers are reluctant to offer above 2:1 leverage. Other markets tend to emulate the latter example. This makes it much harder to generate significant profits, and if you find yourself reliant on your trades to bring in an income, greater earning potential is always going to be a benefit.
Secondly, in some ways, forex is less volatile and lower risk than other markets. Many would argue that because of its scope and the constant internal drive for stability within countries, it is easier to predict the future economic health of currencies than companies. The financial figures tend to be much more transparent and harder to manipulate, meaning that it’s easier to get a clear idea of what’s going to happen. Additionally, countries go bankrupt far less frequently than businesses.
The third and final benefit of forex is its flexibility. The financial markets trade around the clock, meaning that there are always opportunities to be had. If you’re working around a baby, a second job or a hectic social life, then that’s alright. If you can’t commit to trading 9am-5pm, then trade from 4pm-12am.
The most important thing to remember is simply this: if you’re going to see forex as a business, then treat it that way. Avoid thinking of it as a way to ‘get rich quick’; this isn’t realistic and it won’t lend itself well to long-term success. Instead, invest time and money in developing the skills and seeking the advice you need, trade sensibly and learn the markets inside out. If you can do that, then who’s to say that you won’t end up taking the forex world by storm?