Don’t Let a Loss Discourage You
Guest post by Ethan Featherly
Many people are struggling to make ends meet, and they are looking for a more profitable way to earn a living so that they can live more comfortably in London. Others may be doing well in their jobs, but they are not able to contribute to saving and investing enough for the future.
If you can relate to either of these two scenarios, you may be taking a closer look at financial trading to determine if this is a reasonable way for you to buffer your income with a side job or if it could possibly become a full-time job for you. With a closer look at what Forex trading is and how you can make money through it, you may be able to determine if you want to jump into this type of investment activity.
What Is This Type of Trading?
Trying to find a way to make ends meet or to meet your savings goals can be frustrating when you only have a limited amount of income to work with. You may be aware of individuals who have experienced great financial success from Forex trading, and you may be ready to jump in and follow their lead. This is a special type of trading that trades off of the value of currencies around the world.
According to Huffington Post, this is a 4 trillion dollar market, and this means that it is ripe with opportunity for you. Through this type of trading, you must predict whether certain foreign currencies will move upward or downward on any given day. All currencies are traded on the foreign exchange market, and their values are often determined by economic news, political issues, and other factors.
Becoming a Forex Trader
If you want to know how to become a trader, you must first determine how much capital you want to invest in this market. Smaller trades are often a good idea when starting out, and this is because you can learn the ropes without risking your entire portfolio. You may be able to open an account for as little as $100.
However, many Forex brokers prefer or require that you invest at least $10,000 or more when opening your account. You then will need to research the market and make currency trades that are based on how you predict the market to change. In this way, trading in the foreign exchange market is very similar to trading in the stock market.
Still, you will need to pay close attention to world events so that you can make informed decisions about your trades. Keep in mind that some Forex brokers allow you to create a demo account. This gives you the ability to learn more about Forex trades and to become comfortable with the process before risking your own money.
Determining If You Can Earn a Living by Trading in the Forex Market
Before you spend time, effort and money learning more about this type of trading activity, you may want to know how lucrative the market is. How much money you can make will depend on the market movement, how well you pick your investments and how much money you have available to invest. Unlike stock markets, the foreign exchange market operates 24-hours per day.
This means that you generally should set stop or sell orders so that you do not lose money while you are asleep or away from your computer for a period. If you set proper sell orders to moderate risk, it may be possible for you to return up to a 30 percent gain or more in a month. However, a more reasonable return is approximately five to 15 percent.
If you need $7,000 per month to live each month comfortably, you would need a $140,000 investment of capital that returns five percent. If you are a more successful day trader in this market, you may generate that level of income with a $46,667 investment that generates a 15 percent return.
These lower returns are more realistic, and this is especially true if you are a new investor who is not familiar with the market yet. To determine if you can live off of this type of investing, consider how much money you can reasonably invest.
Conclusion
Remember that you are putting this money at risk. A smart idea would be to start out with a smaller investment, learn the ropes and increase your Forex investing account balance over time. You may generate part-time income at first. Over time, your account balance will increase, and you may be able to generate a great return that you can live off of comfortably.
The idea of quitting your day job and enjoying a lucrative income by working from home in the Forex trading market can sound too good to be true. However, you can see that it is a possibility even if you are only able to generate a modest return each month. It is wise to learn more about this market and to start paying attention to how world news affects foreign currency as a first step.
