Is Forex Trading the Right Choice for You?
Posted on: 22 May 2015 by Bryan Smith
As we grow older, more and more of us begin to consider ways of supplementing our incomes.
As we grow older, more and more of us begin to consider ways of supplementing our incomes. Retirement looms on the horizon, and we want to know that when our working life ends, we’ll still be financially secure. Taking on a second job seems impractical, and a promotion at work is not always on the cards. This is one reason why people increasingly turn to investing as they move into their forties, fifties and sixties
One of the most popular investment markets for these new traders is the foreign exchange, which centres around the exchange of currencies. Flexible, with a low accessibility threshold and around the clock trading hours, it can be the ideal choice for those looking to bolster their earnings or earn themselves a tidy little retirement pot.
But is it the right choice for you?
Do You Have Time for Trading?
One of the greatest benefits of forex is that you can trade whenever you choose to. Aside from Saturdays and Sundays, the markets are open 24/7, meaning that you can trade before work, during your lunch hour, or when you’re done for the day. Despite this flexibility, however, currency trading is still time-intensive. Unless you can devote a minimum of five to eight hours a week to studying data, making your moves, and tracking the progress of your portfolio, then it’s probably not the right activity for you.
Do You Have the Funds?
Another point to consider is the cost of investing. Although forex has a relatively low accessibility threshold, the individual costs that you incur will be entirely dependent upon the type of service you use. For those with little time or experience, a discretionary broker may be the only viable choice, and this will cost infinitely more than one of their execution-only counterparts. Be sure to base any quotes that you calculate on the exact service that you’ll need, as opposed to the lowest costs you can find, before committing to anything. Remember, if the package you require seems too steep, then there will be little profit left to bolster your retirement fund, and it may be that forex trading is not the solution you’re looking for.
Do You Have the Right Attitude?
A final point to consider is your attitude to losses. In the world of the foreign exchange, losses are inevitable, even for the most experienced and successful of investors. The trick is not to be bothered by them. Unless you can keep a clear head even when your account is heading towards the red, then forex trading is not the right occupation for you.
Still not deterred? Then sign up with a broker like OANDA today and give forex trading a go.