So, you’re considering going full-time as a forex trader, however, you’ve got a lot of questions you’d like the answer to first. Is it the right move for you? How much can you make from forex trading? Is it even possible to go full-time?
Rest assured, plenty of people have left their day job and taken a dive into forex trading. Better than that, many of them have not only managed to replace their full-time income but have increased it, some by huge amounts. So if you’re wondering how much you can make from forex trading, and whether it’s a plausible option for you, let’s take a closer look.
Can trading forex become a full-time job?
You’ll find workaholics in every industry, including forex trading. Even the most successful forex traders can spend every waking hour staring into charts and reports to monitor the movement of currency pairs. And then after all this, they might not make what they’d like to.
Before you hand in your resignation and dive into your career as a professional forex trader, it’s important you understand not only the benefits but the considerations too.
What is Forex Trading?
Forex trading, also known as foreign exchange trading, is the buying and selling of currencies in order to profit from the fluctuation in exchange rates. It is the largest financial market in the world, with an average daily trading volume of around $6.6 trillion. Forex traders can trade currencies directly, through a broker or a trading platform, and can profit from both rising and falling exchange rates.
Why start forex trading?
Unsurprisingly, like any career, there are some risks associated with the foreign exchange market and forex trading. However, there are also plenty of advantages making it an attractive career to many. These include:
For the independent trader, currency markets are among some of the most accessible. You can easily set up an account within days and start trading with as little as £50. It’s possible to trade online through most brokerages, this means you can have access to news, pricing and tools via online trading platforms.
The great thing is, the forex market is open 24 hours a day, five days a week, so a job in forex trading can fit around your life much easier than other types of trading or jobs.
Flexibility in working hours
The forex market is open all day, meaning forex traders can work as and when. This proves a great advantage to short-term forex traders who work over short periods, from minutes to hours. In fact, some traders make trades during the late hours. So, whether you’re a night owl or an early bird, a forex trading career could be for you.
Potential for fast returns
The forex market has deep liquidity and is fast-paced. Combining these factors with the higher leverage available to forex traders allows for fast returns. In other markets, traders might need to wait for more long-term asset value growth and returns from the assets they’ve traded. If you were wondering “how much can you make from forex trading?”, then you’ll see this as a real benefit.
Fewer fees and commissions
Typically there can be some hidden fees and commissions that can make trading more expensive. However, this is spared in currency trading on the foreign exchange market.
Forex trading costs are usually determined by the bid-ask spread. This is the difference between the buying and selling price that is published by brokers in real-time, making the market way more transparent.
Simple tax rules
Where traders in other markets may have to keep special tabs on their short-term and long-term trading activities for tax reporting, forex trading is often subject to more simplified tax rules that can make tax calculations easier.
Automation trading strategies
Forex trading has adapted well to automated trading strategies. After some research, most forex traders can set up automated trades, stop loss and limit prices. As well as this, forex traders can teach the software to trade on particular price movements or other conditions.
Foreign exchange traders with a cleverly automated forex trading strategy are able to take advantage of the daily rises in the forex market without exhausting themselves.
Ease of entry for beginners
With no substantial initial investment, forex trading is straightforward enough for beginners to enter the market. This means that beginners can get involved in forex trading, without taking a huge amount of risk. However, while it may be simple to get started, time is needed in order to develop your skills in forex trading.
Things to consider before becoming a forex trader
What exactly are you hoping to get out of forex trading full-time? Are you looking to completely replace your full-time income? Or supplement it to begin with? Some prefer to delve into forex trading in the short term before considering going all in.
No matter your intentions with becoming a forex trader, it’s important to have your goals outlined with crystal clarity before you decide to go full-time as a forex trader. While your first question may surround how much can you make from forex trading, there are plenty of other things to consider first.
Whether you’re considering going into forex trading long or short-term, there’s a lot of research to be done first if you’re to be a successful forex trader. If you’re hoping to kick back, look at a chart now and again and make trades on a whim, it’s unlikely you’ll be able to make it as a full-time forex trader. However, if you’re willing to work hard and learn what it takes to trade currency and be a professional trader, this could be a new career.
Your starting capital
You’ll also need to consider how much capital you have access to and what you’re willing to invest into the forex market.
If you have quite a pot of your own money, you could capitalise on the extra leverage that forex brokers offer and gain profits.
Lack of transparency
As the forex market is dominated by brokers, you’ll be up against professional traders. It also means that the market isn’t as transparent and forex traders don’t have as much control over how their orders get fulfilled. This means that you may only see limited quotes or not be given the best price. The best way to deal with this is to only go with regulated brokers, the market may not be controlled, but the activities are.
High risk, high leverage
Trading forex can be high leverage; this means that you can get profit and loss exposure several times the trading capital. Forex markets allow leverage of 50:1, so you only need to have £1 to take a position worth £50. Yes, a forex trader can benefit from this leverage, but the loss is magnified. Forex trading can quickly lose you money if you don’t have an
in-depth knowledge of leverage and control over your actions.
Learn more with Financial Markets Online
Being a part of Financial Markets Online allows you to gain valuable insight into the world of forex trading. From forex trading strategies to trading styles, swing trading and currencies, our courses will give you the in-depth knowledge you need to become a full-time forex trader.
Get in touch with us today to learn more about going full-time as a forex trader.