Trading forex can be a high-risk activity, as you buy into one currency hoping it will increase in value but the opportunity for it to fall and you lose out is always there. Some even see it as a form of gambling, believing the risk outweighs the reward. However, when done carefully the rewards can outweigh the risks, it’s all about getting the balance right, and forex trading can be a great way to make some extra money in your spare time for a number of reasons.
Numerous Trading Options
The forex market is the largest and most liquid in the world, with over $5 trillion on average traded every day. There are hundreds of different currency pairs available to trade, from the popular major currencies such as the US dollar, euro and British pound, to minor options ranging from the Norwegian krone to the Somalian shilling. This presents numerous opportunities to trade just one or two pairs or diversifying your portfolio to include many different ones. Some can be used to offset the risk presented by others.
Thanks to advancements in technology, trading forex is now more flexible than ever. It used to be that you would need to hire the services of a broker to make any trades but now anyone can trade the markets with FxPro from a desktop, mobile or tablet platform. This means you can trade from anywhere in the world with an internet connection and across the various forex markets, as it is open 24 hours a day, 5 days a week with bases in Tokyo, London, New York and more working on different time zones.
Another benefit of forex trading is that it is a leveraged product. This means you only need a small initial deposit to enter a trade, providing the chance to earn big profits from a small starting capital. However, increased leverage does also increase the losses you can make as well as the profits, which is why setting stop losses and having a good exit strategy is vital for all part-time as well as full-time traders.
Compared to investing in stocks and shares, you only need a relatively small starting capital to access the forex market thanks to leverage. There is also a lot of helpful information available online to learn more about the practice, along with most brokers offering a demo account so you can practise trading before doing it for real. Such accessibility makes forex trading a great option if you’re looking to make some extra money in your spare time.