Making a business in trading has become much more feasible a strategy for sole traders in recent years, as online trading platforms have become more prevalent and popular. Foreign currency exchange, or forex, is a standout opportunity for budding traders; unlike national stock exchanges which limit the trading of domestic stocks to their trading hours, the foreign currency exchange is technically open 24 hours a day, five days a week. This makes forex a much more flexible market on which to build a business, especially if it is a new business being built around existing work.
The following illustrates how best you can prepare yourself to start up a new business in forex.
Learn the Basics.
In order to start a business centred around foreign currency exchange, you’ll need to familiarise yourself with the basics of the market. Begin with literature resources and articles on the operations of the forex market, in order to get to grips with how it operates and how businesses operate within it. Start using a retail forex trading broker to enact different currency trades, and gain an understanding of the process. Now is also a good time to start following the news regarding international trade and economies in other countries, in order to better understand what external factors can impact the market.
Gain Experience.
With the basics well-understood, you still have a little way to go before business-readiness. Practice is a crucial part of fostering reliable results; though forex markets are open for five full days, fluctuations in price can immediately date any potential transactions you were gearing to make. With time of the essence in forex, practice can ensure you know your way around trading processes and systems enough to make timely trades, and react quickly to the market.
Make Mistakes.
It is important to recognise that, even with practice, you will make mistakes as a trader. Some fluctuations are easy to read, and money is there to be made from those trades – but bigger trades come with higher risk, and there will be times that you lose money as a result. This is a part of your business’ growth, and an excellent learning experience. By onboarding harsh lessons about risk, you are better poised to make complex decisions with someone else’s capital in the future.
Strategise.
One of the secrets to success in forex trading is the adoption of a strategy. It may be that you find patterns in currency fluctuations following certain news stories, or that you avoid trading in certain markets at certain times owing to increased volatility. These simple moves could be regarded strategy – but combining all of your observations with real-time analysis can create a strategy with a unique fingerprint, and help you guarantee better returns over time.
