In the present economic scenario, there are many people who are either unemployed or are finding it difficult to get a job. This is on the account of intense competition in the employment field. But there is a ray of hope for such individuals and the easy solution is to start working from home.
The immediate question that would arise is what kind of job can I do? There are jobs like data entry, online advertising, trading in securities, freelance article writing, freelance consulting or freelance recruiting that can be done from home. Apart from all these jobs, foreign currency trading is liked by many people. You can do trading by working from home at your own convenience. There is no restriction or any fixed working hours. Flexibility & Convenience are some of the basic benefits while working from home. Plan Your Schedule Accordingly.
Foreign Currency Trading is nothing but buying and selling of foreign currencies in the foreign exchange market. Previously currency trading was restricted to big corporate like banks and multinational companies. But now even individuals can participate and do currency trading.
No doubt it is more or less similar to share trading. There is lot of volatility and you need to be little careful while trading in foreign currency.
Careful analysis of the market conditions and the vision to make more money can no doubt make you a trading expert.
There is a base currency and counter currency. There are Foreign Currency Quotes and it is traded in pairs like USD/JPY (USD – US Dollars and JPY- Japanese Yen), EUR/USD (EUR- Euro). If you feel that on a particular day the US Dollar is likely to increase against the Japanese Yen (JPY), you can buy it. When the exchange rate goes up, you will sell the same and thereby make good profits.
The entire market depends mainly on global conditions, economic conditions, political factors as well as industrial performance. Any unforeseen events could trigger the market either way.
How to trade foreign currency? There are some important tips that need to be followed in foreign currency trading.
The 12 most important tips for trading to be done efficiently are:
1) Start Saving Money: It is important for you to start saving money. Once you have enough money in hand, you can easily invest 5% to 10% of your savings in the foreign exchange market.
2) Plan Your Strategy or Trading Plans: There should be good planning before you start to trade. There are lots of momentum’s in the market. Sometimes it might go up or go down, at times there could be swings. It is important for you to decide which position you are going to take, whether you are looking for short term gains or long term gains. So you need lot of exposure to the market and do intense research or take guidance from your broker or tips from the company through which you are trading. Study the Market Conditions Very Carefully and do a thorough Analysis of the Market before putting down your hard earned money. Whenever you get time, devote time to do research on the market. Study and doing research will definitely help you in becoming a trading expert.
3) Be ready to face any Uncertainty: Once you start doing Online Trading, you should be ready to face anything. There is no doubt that volatility is the core of foreign currency market. So be prepared to take little risk. Decide your risk appetite before trading. It is important for you to be careful and at the same time, take little risk if not too much of risk.
4) Pick the Right Quotes or Right Currency Pair: It is important to ascertain the market climate and pick the right pair. Study the market carefully. It is important to use technical charts while trading.
5) Take suggestions or tips from your Broker/Company: Take the guidance from your broker or company through which you are doing the trading.
6) Do not be greedy: Do not become desperate to make profits as this could erode away your savings. It is important to plan carefully your risk appetite as well as trading strategy. Be contented with what profits you get. If you have made a good profit for the day, stop trading and plan for the next day. There is a saying that man’s wants are unlimited. So you need to remain content with what you get. Slowly you can build up your finance. There are opportunities in the market every day. On some days, the market may not favor you and you may not succeed in making profits. So try to control your emotions.
7) Start trading with a small amount: It is better to start trading with a minimum amount. Invest 5% or 10% of your savings and this primarily depends on your financial capacity.
8) Check credentials of your broker/company before opening an account: Always trade through a reliable broker and check their track records.
9) Use demo accounts before actually starting online trading.
10) Attend a training session before entering the online market.
11) While trading, always maintain a stop loss and watch for currency pairs that have less spreads.
12) Have a tab on market charts, market fluctuations and timings.
While going for online foreign currency trading, there are certain procedures that need to be followed. In case you are operating through a broker or company, you need to open a foreign currency trading account which could either be a single account or joint account.
There are certain documents that need to be furnished along with a minimum amount for trading.
The following are the list of documents:
– Account Opening Form or Online Application
– Tax Form (W-8 BEN for Non-US Customers)
– Photo Identification, Residential Proof
– Funding account for participating in trading
– Other Supporting Documentation
– Trading Agreement
Advantages of Online foreign exchange Trading:
There are lots of advantages involved in Foreign Currency Trading as it is easy to get started with a minimum amount. The basic plus point is that it can be done from anywhere and is done in many countries. The market is opened for 24 hours. There are different markets like Asian Markets, European Markets, New York Markets etc which open at different timings. Choice of Currency and zero percent commission in some of the countries are the major benefits involved in Currency Trading.
There is no doubt that there are some disadvantages also while doing foreign exchange Trading. Markets are volatile and hence there is risk factor. Losing capital is also quite high. The market is primarily dependent on economic factors and political climate. So you have no idea what is in store for tomorrow. These are the major disadvantages involved.
But without taking risk, you can not earn good amount of money. Once you study the market very well and become an expert trader, there is no need to fear.
Foreign Currency Trading is a good idea of making money. But my personal recommendation is that do a solid research on the market, undergo training and then start online trading. The basic idea behind this is that on account of lack of knowledge and volatility in the market, there are chances that you might lose your hard earned money. But with good knowledge and intense research, you could earn very well sitting from home.