BALANCING WORK AND FOREX TRADING: TIPS FOR MAKING IT A SUCCESSFUL SIDE INCOME
Making Forex a Successful Side Income
Tips for Making Forex Trading a Successful Side Income
Forex trading has taken off over the past few years, with more and more people diving into it. Forex was once thought of as something only financial experts took part in, but now with the help of the internet and social media, regular people have taught themselves and entered the market.
However, if you don’t want to become a full-time trader but want to use forex for a side income, some tips will help you do it successfully and allow it to become more profitable.
Have a strategy
The first thing you need to do is to have a strategy. Multiple trading strategies to choose from and use as is or adapt for your needs. Platforms such as tradingview make strategy creation easier by providing multiple tools and indicators you use to track almost anything you want.
Also, be aware that your strategy/strategies will change with each trade or currency pair you choose. Every pair isn’t the same; therefore, you may need to approach each trade differently.
Manage your money
To be profitable, you can’t throw your money at every trade; managing your money and having a budget will allow you to minimise your risk while keeping your portfolio growth and profits consistent.
Once you have a budget you are comfortable with, stick to it until you are financially in a position to invest more.
There is risk associated with every type of investment. Therefore, the best thing you can do is to understand it and mitigate it. The golden rule of investing and trading is to invest only what you can afford to lose.
There is no need to go all-in on a trade because you think it is your golden ticket; the world of forex is forever changing, and there will always be opportunities for you to take if you miss out on other ones.
Portfolio diversity is another crucial element for making any type of investing and trading profitable. Putting all of your eggs in one basket is a recipe for disaster and is also something you never need to do.
In forex trading, a diverse portfolio should have a mixture of long and short-term positions and positions within the major, minor, and exotic pairings. Considering currencies such as the dollar and euro have so much influence over other currencies, holding positions that don’t include major currencies such as those will allow you to balance your ship in the event of a dip.
Any decent trader will tell you that research is half of the game. Staying on top of financial news and current events will give you incredible insight into which currencies are strengthening, which are weakening, and which are set for huge climbs and dips.
If you are taking the news trading route, logging into Reuters or Bloomberg every day should become a habit, as those will be the best places to see breaking financial news.
Control your emotions
Trading and investing are two things that don’t have any space for emotion. The biggest problem with letting your emotions get involved is that you make split-second decisions that don’t work out nine times out of ten.
Whether you are on a low or high, always stick to your strategy; don’t throw money into a random trade to try to make up for a loss, but don’t get arrogant and excited after a win and think every decision you make making is smart.
Know when to take a break
One aspect of trading that is severely underrated is not trading at all. Seasoned forex traders will tell you that it can become a very data and number-heavy experience, which can often lead to burnout and mistrusting your abilities, which can cause poor decision-making.
If you are on a run of poor trades, rather take a break for a couple of days, reevaluate your strategies, and try again.
Know when to hold ‘em & when to fold ‘em
Turning forex trading into a successful side income requires knowledge of when to stick with trades and when to sell and move on. You aren’t going to make the right decisions every time, and accepting the loss and moving on is best for you and your wallet.
Follow the Pros
With social media as big as it is, thousands of Instagram, Twitter, and YouTube accounts are dedicated to forex trading. Within these accounts, dozens of professional and seasoned traders share their knowledge for you to use.
While you should take what they say with a grain of salt, using them as a way to learn about new pairs, emerging markets, or anything else you aren’t up-to-date with can be similar to a crash course and give you the essential knowledge you may not be able to find elsewhere.