How to Become a Successful Part-Time Forex Trader

Foreign exchange trading is a lucrative business idea that can help you supplement your income without driving attention from your current main job. It’s something that can be done part-time and on a scale that suits your needs at a certain point in time or it can evolve into a full-time job.

Forex trading refers to trading in foreign currencies. It’s a relatively stable market because rates are a bit lower than with other trading options. It also allows you to trade in a variety of currencies, meaning that it can be done on your time entirely.

The capital

The main thing you need to start trading is the initial capital that you can invest. For most other types of trading this is a difficult obstacle to overcome, because you need quite a lot of it to get a trading career started. This isn’t the case with forex trading.

Almost anyone can start trading because the initial capital can be as low as $300. However, this means that you won’t have any professional assistance along the way. Most brokers would require you to have $1000 on an open mini account.

Goals

Before you can actually start trading, it’s important to lay down a few goals and expectations you have for the whole enterprise. The first thing to consider is how much time outside of your main job you want to dedicate to this side gig. The next thing to figure out is what you want to accomplish with the trading, both in terms of profit and in terms of funds in relation to your main income.

These goals should also come with a timetable, in order to measure how well you’re doing and whether your new business endeavor is worth it.

Demo account

A lot of brokers provide the option of using a demo account to practice trading without the fear of losing money. The account has all the features of an ordinary trading account and it works in real time, with real rates and prices, but doesn’t involve any actual trading.

It’s also possible to get lessons or at least advice from an actual broker. Some provide this service with a demo account and others charge for it as an additional service. It’s worth your while to understand the process before actually risking any money.

The right pairs to trade

There are a lot of considerations to be made in regards to choosing the right pairs of currency to trade in. First and foremost forex trading happens 24/7 in different time zones and you need to choose pairs that fit into your daily schedule.

It’s also important to understand the currencies you’re trading in. That means that you need to learn about the economy of the country that uses that currency. The simplest option is to trade in US/EUR because that can be organized around any schedule.

Apply discipline

Having discipline in your action is one of the most important things you can do in order to trade effectively. This means that when you decide on a course of action, you stick to it. A part of it is to give up when you notice that you’re at a loss for a longer period of time.

It also goes in the other way – you should know to quit while you’re ahead. When you clear some money on a trade, it’s best to save at least a portion of it before you start investing further. This seems like a simple thing but a lot of the time, traders don’t have the discipline to do it.

Automated trading

Technology is changing all businesses almost on daily bases, and that’s true for forex trading as well. As with most things, the change is mostly positive, but it requires adapting. One of the options that the tech provides is the mimicking someone else’s trading and to using this to learn from them.

This is a good way to understand the field but only if you choose an experienced trader whom you’ll mimic. The fact that the trader makes a profit doesn’t mean that their trades will suit you.

Have a plan B

Forex trading is safer and has smaller risks than other types of trading. However, that doesn’t mean that every trade is going to be successful. Sometimes you may lose money in the process and this is something that you need to prepare for.

The first thing to decide on is when to stop trading, but also you need to make sure that some of your assets are secure and not affected by the trades that you make at all.

Part-time forex trading can be a lucrative side gig. It requires planning, studying and careful consideration but it can eventually add to your revenue in a significant way.

Sources:

https://www.thebalance.com/how-to-become-a-forex-trader-1345140

https://www.investopedia.com/articles/forex/11/become-successful-forex-trader.asp

https://www.investopedia.com/articles/forex/09/5-important-forex-attributes.asp

https://www.thebalance.com/how-to-calculate-the-size-of-a-stop-loss-when-trading-1031386

 

https://www.investopedia.com/articles/forex/05/demotrade.asp