Money – Everyone’s trading Forex, here’s a simple guide how
A lot of us end up choosing to stay at home for a few years once our family starts to grow, but that doesn’t stop the bills from coming in. Transitioning from a dual-earner household to a single income can be stressful even at the best of times.
The added financial strain alone is enough to make us start second-guessing our decision, but many new moms also feel anxious about the fact that they aren’t earning anymore.
This is where Forex trading comes in. Forex trading is global currency exchange, trying to take advantage of dips and surges in currency to multiply your investments.
This might sound difficult, but it’s actually not that difficult to get started. Follow a few of the steps below and you’ll soon be on the way on making money while the kids nap or are at playschool.
1. Understanding the basics.
Before you get started we have to break down how this works.
Let’s say the Euro isn’t doing so well this week, and you can buy at a rate of $1.03 per €1. Now, the Euro usually trades at a rate of something similar to $1.10 per €1.
So, upon noticing this slump in the Euro, you buy €50 at the rate of $1.03 for $51.50, and then hold onto it for a week or two until the Euro climbs back up to a rate of $1.09 per €1, and then decide to sell. Your initial investment of $51.50 for €50 now turns into $54, netting you a profit of $2.50.
Now this might not sound like much, but if you keep at this for a few months, an initial investment of $50 can easily turn into $400-$500 if you play your cards right.
2. Choose a broker.
In 2017, brokers aren’t just guys in suits who work in offices covered in glass and chrome. Most Forex brokers today are just online services, just companies who grant you access to a trading system.
When choosing a broker, it’s super important to consider a number of factors:
- Are they a reputable company? Take a look at the quality of their website, and whether their website hosts any tips or tricks to help their customers earn money.
- Do they charge a commission on profit, or per transaction? A decent broker isn’t going to contribute to you going broke, they’re going to want to take care of their customers, just like any other legitimate business.
I personally use CMC Markets, because they have an app for my iPad and my Android phone, so I can check things while on the go, or even while just sitting on the couch and watching cartoons with the little ones.
3. Find out what the average exchange rates are.
Before buying anything, you need to be able to recognise whether a rate is high or low. This sounds like a lot of work, but us moms are nothing if not resourceful. A little bit of Google-Fu, and you’ll be good to go.
Pick two or three currencies, and see what they’ve traded at for the past 6 months or so against the dollar, or whatever currency your country uses. Get a sense of what the average is, and then start looking out for good deals.
4. Set limits for yourself.
One of the biggest mistakes you could make is overextending your investments. With Forex trading, sometimes your profit, and sometimes you lose. Luckily, while the profits per transaction are low, so are the losses; meaning it’s extremely easy to make sure that you don’t make any decisions that are too stupid.
Start by defining an initial investment amount. Starting with $50-$100 and splitting that money across a few transactions is the best way to go. Between a house, kids, and a personal life, you don’t need any more anxiety, so don’t go putting all of your eggs in one basket.
5. Start with a demo account.
Most good brokers will let you start off with a demo account, which is an account which has certain limits to limit new traders’ losses. Take a few risks with your demo account, as you won’t be losing too much, and start to get a feel of how things shift and move. You’ll get the hang of it in no time at all.