If you’re a small business owner, you’ve got a startup that’s going places, or you’re an entrepreneur, then you should know that you never put all your eggs in one basket. And while such a statement has multiple applications, it’s a lot more applicable in the world of business and finance. Forex trading can really open up a small business owner to a world of opportunities, so much so that you might make it your sole income – although that would take real commitment and passion. However, it could also serve as an addition to your business portfolio. At the end of the day, the attainment of cash is the end goal, and for whatever reason you choose to pursue forex trading, here are 4 reasons to do so.
- Minimal start-up capital requirements
A major drawcard of forex trading for entrepreneurs and business minded individuals is that unlike trading in stocks, that requires you to actually purchase a set amount of stocks – which often comes with a hefty fee – forex trading asks for a much smaller start-up capital. For instance, if you’re going to trade stocks, you need at least $1 000 and in some cases, the SEC (Securities and Exchange Commission) will insist that traders have at least $25 000 in their trading accounts as it serves as leverage. When it comes to trading in forex, the leverage that you’re extended is such that you can have as little as $500 in your account and start trading on currency pairs at a ratio of 50:1. This means that for every dollar, you can buy up to $50, making your total trading value $25 000. You can trade with strong currency couples such as GBP/USD or the with US dollar against the Japanese Yen – there are numerous options. It needs to be noted though that the volatility of the market means that great wins can be equalled by great losses, so don’t get all excited and go in there trading like a bull in a china shop.
- Easy to grasp
The concept of forex trading itself is quite easy to grasp. In fact, if you’ve ever travelled overseas and exchanged your currency for another, you’ve pretty much involved yourself in it. Placing a trade and deciding when you’d like to exit the trade is also incredibly basic. So, the act of forex trading is incredibly simple, the mastery however is a different story. The good news is that there are various tools, books and apps that can assist you. It needs to be noted that there’s no sure-fire solution in forex trading, but there are things you can do. For instance, before you sign up with a broker, you can open up a demo account which will let you trade in a simulated environment that replicates the actual one and lets you practice at no cost. You can also purchase automated trading software that does the trading for you, and there are various helpful publications by renowned authors that you can read.
- Trading platform options
The internet really is the ultimate enabler. Without it our access to a vast array of information would be non-existent. It’s also largely responsible for your ability to trade in forex. In the past this type of trading would have been available to only a handful of individuals, but now Joe Public can easily get involved. Part of the path to success is choosing a reputable broker online. Should you not have any experience in currency trading, then it’s best you select an intuitive trading platform with an easy-to-use interface. The majority of online trading platforms offer efficient as well as mobile compliant interfaces, thus allowing you trade whenever you feel like it.
- It fits into your schedule
Finally there’s the flexibility of forex trading – transactions can be done any time of day as the market is open 24 hours, 5 days a week. In terms of device usage, you can use your PC, your tablet or your smartphone – sneak in a trade while you’re on the job – it doesn’t take long. The forex market is made up of four sessions – New York, Sydney, Tokyo, and London – when one closes, another one opens. However, it needs to be noted that the time of day you choose to trade can greatly influence your outcomes and any seasoned trader would advise that you trade when the market activity is at its highest because there’s more liquidity (money) in the market, thus creating more opportunities to trade and potentially profit.