Part-time Forex trading as a way to get additional income
Recently, a huge number of schemes promising fast money began to appear on the Internet. But with time they become outdated and stop bringing profit, so novice traders are very doubtful whether it is real to earn on Forex in 2021, using the usual techniques, because the market has become very unpredictable. Despite the seemingly dubious way of earning, every day hundreds of thousands of traders earn thousands of dollars on Forex. Each of them uses their own scheme, which they are unlikely to tell anyone. The beginner’s task is to get as much reliable basic information about trading and peculiarities of price movement in the market as possible.
What is Forex
The word Forex comes from the Foreign Exchange. In simple words it is a financial market, where currency exchange takes place every second. Pay attention! The Forex market was created in 1976 as a result of the world’s countries rejecting gold as the main regulator of the currency value and switching to the system, which allowed for setting the exchange rate not by the state, but by the market, such a scheme is called Jamaican. Thus, at the moment it is impossible to imagine the normal functioning of the economy as a whole without Forex. Some traders prefer to call this market a currency exchange. But this is a mistaken statement. This is an over-the-counter international market with no reference to a particular place where trading is taking place.
It is a completely virtual marketplace that transactors use to buy and sell currencies from any country in the world. Another notable difference in Forex is the ability to use very modest capital to start trading.
What is traded in the Forex market
In Forex, traders make money by selling their own or another country’s currency. If information on the fall or rise of the rate is received, a person simply resells the currency and receives the difference of the sale. That is why this option is called a fast earning opportunity. But if you do not have enough knowledge and do not develop your own strategy for working in the market, you will not be able to earn a penny.
How much money you can earn on Forex
Any trader is unlikely to make the same amount of money on Forex in the first and second month. It could be $1, or it could be $1 million. There are several factors which affect the income. One of them is the situation on the market. No trader can predict exactly how the currency trading market will be today and in a week. If a trader is experienced enough, he can make several profitable deals during a day if we speak about short-term trading. But if we are talking about long-term betting on the rise or fall of the exchange rate, the signals have to wait for a very long time, sometimes from 1 to 3 weeks. But in this case no one can know the speed of price fall. Having made a profitable deal, a trader can earn different sums. One more factor, which is sure to affect the profit, is the level of risk. It is present in Forex, but its degrees are different.
Some traders are ready to stake all their capital, while others risk with small sums, counting all the steps in advance. Besides, there is a dependence on the purse used for trading — personal or investor’s one. If it is someone else’s account, you should always remember about certain restrictions, because investors are often very thrifty. Pay attention! Regardless of how much a trader earns on Forex, 5-10% of his income always depends on luck. Luck can also play a role. A person, who enters the trading market, must be able to think and analyze.
If a beginning trader is too receptive, gambling and hot-tempered, he will fail. As it was said above, at any such market earnings are not calculated in concrete figures. Experienced traders are used to talking about their earnings as a percentage. That’s why everything depends to a greater extent on the amount of capital on the trading account. The income of an experienced trader is about 50-60%. This means that if his capital is $10,000, his earnings are $5,000-6,000.
Earnings possibilities with minimum investments for a beginner
It is better to create a mini-account for a beginner on Forex to trade on mini lots. At this stage, it will be the best option for learning how to manage funds so as not to lose large amounts at the start. It should be noted right away that you will not be able to earn here without any investments. Money is needed to buy foreign currency and resell it at a higher price. The best way not to lose money on the first transaction is to detect a definite fall of one of the currencies and to bet on its further decrease. For instance, it is very difficult to make money on the fluctuations of the dollar against the euro, because they almost always remain at the same level.
For example, when in 2008 there was a noticeable fall of the English pound in relation to Japanese yen, almost all traders took advantage of it and multiplied their capital by several tens of millions of dollars.
Professionals earning with investments
Aggressive trading is a good way to make large profits, which is often used by professionals. It can help increase the size of your capital by several times in a very short period of time. With the help of this method, a trader of a well-known company in just one week made $60,000 out of $5,000. The possibility of obtaining so much money so quickly constantly attracts a lot of novice traders in Forex. But since all of them are in a hurry and do not take enough time to study, 95% of them lose all their money at the first trades.
Tips for beginners
First, a beginner should not think about how much any other trader earns on Forex market. One of the main mistakes is the constant thoughts of millions which prevent from thinking adequately when entering the trade. To enter the trade it is necessary to weigh up everything many times, and only if a signal is detected, which most probably indicates the success of future deal, it is possible to buy securities or currency. If the deal is doubtful, the beginner should not open it. In that case only an experienced trader can estimate the situation. But even he is unlikely to take this step because this risk will not be justified.
The choice of a broker and a financial instrument
To make the deals at Forex, a beginner trader needs a broker, i.e. an intermediary in the form of a brokerage or dealing center. Not only comfort and safety, but also profitability depends on it. The first thing worth paying attention to is the age of the broker. But this does not mean 100% that a recently opened dealing center will be bad. But in order to reduce the risks, you should not trust untested resources at first. At this stage, the older the brokerage center is, the better. To be sure of its age, it is better to find some evidence and only then draw a conclusion.
Reputation is on the second place. A broker who has been working for several years necessarily has a certain reputation among the market players. To check the reputation, you should not trust the first encountered advertising reviews, because they are often just bought for the money and do not carry reliable and useful information. It is better to find independent traders and listen to what they say. You can also use forums, where you can communicate with people not only about the choice of the dealing center, but also about the strategies of earnings. The support service, as well as the organization of the personal account and the software provided, are more important criteria for choosing a dealing center.
In addition, sometimes beginners are offered a kind of share or insurance. But at this stage it is very important not to fall for tricks that are designed only to attract as many people as possible and get money from them. It is also worth paying attention to the commission charged, as well as the credit terms, if they are provided. It is advisable to avoid dealing centers that offer options or similar transactions that cannot be tracked.
Strategies to increase your income
First, an inexperienced trader should not think about how much money can be earned on Forex in general. His task is to find a scheme that will reduce the risks of trading. This is the only way to increase the available capital over time. It is better to start by accepting the fact that you can’t do without losses. Even if we look at the example of the best traders, none of them conducted 100% successful trades at the first stages of trading, as they do now.
In order to increase the income it is necessary to start with minimal investments. As for the particular approach to trading, everyone uses a different scheme here, and it is difficult to single out any of them. One of the strategies that beginner traders start with is looking for the price channel. In this case, no indicators are required. All you need is the price channel, in which you should wait for the breakout and wait for the price to fix. Regarding the disadvantages of Forex, the main one is that it is very attractive for beginners because of the possibility of making huge profits, but with a high probability of losing all the capital.
