“Risk comes from not knowing what you’ doing.” – Warren Buffett
You have heard that you can make money online trading forex?
Now, you want to know other advantages of trading forex?
You have come to the right place.
In this blog post, you will learn the pro’s of trading forex as a business.
But before we proceed…
Let me first congratulate you for wanting to know other advantages that you will enjoy as a trader.
Most traders just jump in without considering what is really in for them.
In the previous week, if you can remember, we discussed about…
What is forex trading and how does it work.
Let us go step by step, you like it? I like it too.
That’s our swag here at forex usher.
#1: forex trading is relatively passive
Forex trading, unlike brick and mortar businesses, can be done on the go.
Actually, all you need to do is read the chart, place the orders, make some prayers and move on with your daily activities.
What does that mean?
It means that forex trading can be a good side hustle.
You don’t need to leave your day job to focus on it.
Interestingly enough, when you make substantial income to quit your 9 to 5 job, you don’t do so to focus on trading.maybe other passions or forex trading related businesses.
#2: You can scale up from nothing
As you already know, what stop most businesses from taking off is the limitation of capital.
In forex trading, what do we say?
I actually emphasis that what can hinder you is not the $100 starting cash, maybe knowledge.
Yeah! Knowledge base can be hectic enough, especially if you are one of those guys who don’t want to share with me your email addresses.
Let say you subscribe to this blog and a few other good blogs like dailyforex, within three years, you will be a forex trading engineer.
You ask how?
If you read for one hour daily, seven hours weekly, thirty days monthly and 365 days yearly, in five years, you will be a full professional with knowledge base the same as a full time graduate.
This is a well accepted fact.
The problem is, will you wait for five years to start earning?
The answer is no, a big NO!.
You will start earning from the day you get the basics and exponent your profits with your learning.
Yeah! Now, that’s it.
Five years! To make money? Gosh! That would have been rubbish.
#3: The power of compounding is now a real magic here
Most novice traders lose money because they want to get rich as soon as tomorrow morning.
While their dreams are valid no matter where they come from. The time factor can be their enemy no matter their expertise level.
With a small twist, especially on time, this thing call FX can work wonders.
Let us change our expectation so that we don’t expect to make a killing tomorrow but in ten years time atleast when our game would have gained enough weight.
Let us suppose we are making a profit of 10% monthly. Most FX gurus will tell you this is achievable.
In a year, we are doubling our account. Now in ten years time, guess what?
We are the new millionaires in town.
This is how we did it.
#4; you can start forex related business
Once you master forex trading, you can branch out and start other forex related businesses.
This way, you will have diversified your income and monetize your hard earned knowledge.
Do you have a writing talent? Well, you can write a book and make a name and money for yourself.
Furthermore, you can learn about how to make money blogging and start a forex trading blog.
Also, you can become an affiliate promoting your broker and make a fortune for yourself.
What about starting a wealth management company to manage other traders money? This can be profitable too.
Traders need training, right? Why not create an online course or run seminars and train this people?
Needless to say, forex trading can be a goldmine for a sharp entrepreneur, the opportunities for scaling up are limitless.
#5; You can run a 24hr economy
Due to the rising cost of living in Kenya, thanks to corruption and unemployment, there is a radical need to up our game.
To do this, we will have to work for more than twelve hours in a day. That’s, day and night.
Trading forex and the related businesses can be done at night while you focus on your normal engagements during the day.
If you couple this with your good money management, then…
You will agree with the saying that there is no poverty for the man who has trained himself to work.
#6; To hedge unwanted risks
Generally, hedging is a technique that is normally used to reduce the risk of unwanted moves in the forex market. This is done by opening multiple strategic positions.
As we have said, forex market volatility is what makes it profitable.
However, as we will discuss shortly, hedging can be a good way of mitigating loss or limiting it to a predetermined amount.
There are a variety of strategies you can use to hedge forex, here, I will highlight the most common, that is;
1: Hedging with multiple currency pairs. How do you do it? You do this by choosing forex pairs that are positively correlated, such as GBP/USD and EUR/USD. Then? You take positions in opposite directions. That way, you can limit your downside risk. A good example? Ok! Let us consider a loss on a short EUR/USD position, this one could be mitigated by a long position on GBP/ USD. Simple!
2: Hedging against loss in other markets, e.g commodities. Example?USD/CAD generally has an inverse relationship with crude oil. Did you know that? Well you have known. Therefore, USD/CAD pair is commonly used as a hedge against falling oil prices.
#7: To secure your nest egg
Do you want a save place to invest and grow your money?
Bravo! you have found it with forex trading.
Simple, because forex trading is tightly regulated. Sometimes even by two bodies.
Remember, this is only true if you do your homework and only trade with a regulated broker.