12 Motives to Begin Forex Trading as a Side Business

Do you want to supplement your existing salary with a second source of income？ You should, and it has to be Forex trading because of its distinct benefits. Here are 12 compelling reasons to begin trading Forex as a side hustle right immediately.

Background

We live in a world that is becoming more costly. Buying a home now costs more than ever. For example, in 1940, the median cost of a home in the United States was $2,938. By the year 2000, the price had grown to almost $120,000. Even after adjusting for inflation, you will have to realize that purchasing a home now is more costly than it was before.

Education is also becoming more costly. Tuition for an academic session at Harvard University is now more than fifteen times what it was about five decades ago. It's no surprise that, as of September 2019, Harvard Business Review estimated that American student debts totaled about $1.6 trillion, surpassing all cumulative vehicle loans and even credit card debt.

Regrettably, despite all of the economic development, salaries have not been growing in lockstep with rising expenses. They are significantly behind the rate of inflation. And, with wealth disparity on the increase, things seem to be worsening. As a result, the days of relying on a single source of income are long gone. A single source of income is no longer sufficient.

So, if you want to be financially free, you should aim to create various sources of income. Despite the fact that you have numerous possibilities, Forex trading is a feasible vehicle for making additional cash on the side.

The Basics of Forex Trading

The Forex market is a decentralized worldwide financial market. It is the biggest of its type, with over $5 trillion in daily transactions. The market is one-of-a-kind, and its attributes have drawn a large number of people to it throughout the years.

Thousands of traders now trade in the Forex market. While there are losers, there are those who trade in it not just for a side income but also to attain financial independence. The Forex market has become a superb area for individuals and organizations to harvest large profits.

So, what is exchanged in this tumultuous market？ It's about money. You have, in some manner, engaged in the Forex market. When was the last time you traveled to Europe？ You had to make a stop at the airport currency exchange to exchange your Dollars for Euros or Rands for Dollars. If you had been paying attention, you would have seen a panel indicating the value of one currency in relation to another. Exchange rates are the relative values of one currency to another.

You were able to exchange a certain quantity of euros for your Dollars or Rands based on the current exchange rate. You would have received more Euros if the exchange rate had been higher. Currency relative values do not remain constant; rather, they change from time to time. And it is because of these swings in currency rates that traders may earn from the Forex market.

Why You Should Begin Trading Forex as a Side Business

The Forex market gives an answer to all of your financial problems. As previously said, it might be an excellent solution if you are seeking for an additional source of money. And if you want to amass enormous fortune rather than just a side income, it might be the ideal way to do it.

There are several reasons to begin trading Forex as a secondary source of income. However, only 12 of them are discussed in this article:

Capital Requirement Is Minimal

When you chat to people who are thinking about trading Forex, many of them will say that a lack of funds is the main reason they haven't begun yet. They may even go on to explain how they are unable to participate due to the large money investment that they believe Forex trading necessitates.

This view is mostly due to misinformation regarding Forex, which portrays it as an extremely exotic industry. When the general public sees Forex traders flaunting their enormous riches, they assume that in order to achieve such a fortune, they must invest a significant sum of money.

Yes, a big capital size increases returns. For example, given identical market circumstances, it will be simpler to develop a $2,000 account to $10,000 than it would be to build a $10 account to the same amount with the same degree of dedication and ability. Attempting the latter is plain absurd. Nonetheless, an untruth that most prospective Forex traders should be aware of is that Forex trading requires a large amount of cash!

Of course, you may begin trading Forex immediately with as little as $10. Retail brokers provide many account kinds with varying minimum deposit levels. This sum may be as high as $50,000 for some of these accounts. However, the typical commission for most brokers is about $250. That implies that with only $250, you may begin trading Forex with a reasonable chance of profit!

As a result, don't allow the thought of a large capital required deter you from beginning to trade. You do not need as much as you believe. Forex trading is a totally democratized effort, so everyone may take benefit of it, no matter how modest the money they desire to invest to it upfront.

Indeed, the cheap capital requirement benefit of Forex has enabled many people to safeguard their financial future. Some of those folks have been able to amass generational riches as a result of it. The good news is that you, too, may join them. All you have to do is join up with our suggested broker, deposit a minimal amount, be trained on the principles and tactics, and start trading!

A Stable Regulatory Structure

The Forex market was formerly known for its frauds. Many brokers set out to cheat eager Forex traders of their hard-earned cash in the early days. Most succeeded. There are now industry gurus that claim to have unique insights into the market and can therefore assist Traders in extracting as much profit as possible from the Forex market.

All of these initiatives resulted in regular people being discouraged from engaging in Forex trading. They are informed that their money would be squandered. While this anxiety has not gone away, it has significantly decreased, and more and more individuals are realizing the wonderful chances that exist in the Forex market.

Many people have even realized that it is the greatest location to go if you want to expand your money quickly. When compared to previous conceptions, this new discovery is really intriguing. But who is to blame for this？ Generally, regulatory standards have been strengthened. For example, there are more and stricter regulatory regulations for Forex brokerage firms these days.

The registration procedure has gotten more stringent, and any person or group wishing to participate will have to disclose more information than they anticipated. This stricter regulatory environment strives to further safeguard traders and their hard-earned money. And if you want to go into Forex, all you have to do is make sure that the Broker you want to use is properly regulated by one of the top regulatory organizations in the world.

Five of them are as follows:

• South Africa's Financial Sector Conduct Authority (FSCA).

• Cyprus Securities and Exchange Commission (CySEC) is the Cyprus Securities and Exchange Commission.

• In the United States, there is the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).

• In the United Kingdom, the Financial Conduct Authority (FCA) or the Financial Services Authority (FSA) is in charge.

• Switzerland's Financial Market Supervisory Authority (FINMA).

So, what is it that is still holding you back？ Because of the strict regulatory environment, monies are secure in Forex. Brokers must be regulated, and they must offer cutting-edge trading conditions. Our chosen Broker likewise maintains our Clients' trading monies in segregated accounts, which means that the Broker company's operations funds are kept separate from the Clients' trading assets.

Use a Broker who is exclusively registered in one of the above-mentioned jurisdictions.

Liquidity is high.

In financial trading, liquidity refers to the ease with which players in an asset class may purchase and sell it without producing a significant change in its price. It is determined by the asset's volume of activity. As a result, frequently traded assets are often extremely liquid. Infrequently traded ones, on the other hand, are often illiquid, and trading them will be tough.

When it comes to the Forex market, liquidity is never a problem. With over $5 trillion in currency traded every day, you can be certain that your orders will always be completed. The market's strong liquidity assures that anytime you wish to purchase, there will always be a seller to match you with. When you wish to sell, on the other hand.

Because the Forex market is so liquid, it is immune to practically anyone's manipulation. Institutional Investors may intervene in stock trading to influence share prices. Greedy people also trick others into buying worthless shares using different tactics such as “pump” and “dump.” The Forex market, on the other hand, is completely different since it cannot be influenced by anybody.

Why？ First and foremost, because of its sheer immensity. How do you anticipate a $5 trillion market being manipulated？ Furthermore, the things that govern it are beyond anyone's control. While governments may want to stabilize exchange rates on occasion, such influence cannot be sustained. As a result, for anybody looking for fair bargains, the Forex market is the place to go.

Its enormous liquidity assures that it is unaffected by the whims and caprices of others. The same element will ensure that opportunities will always present themselves to you from time to time. So, why don't you try it？ For additional details, please contact us right away.

Trading Hours That Are Adjustable

The Forex market is the ultimate ever-working machine, operating 24 hours a day, seven days a week. There is at least one currency pair that you may trade from 5 p.m. EST on Sunday to 4 p.m. EST on Friday. This advantage stems from the fact that various Traders reside in different time zones.

Furthermore, since one sort of foreign commerce or another is carried out at all times, currencies remain in perpetual circulation. Foreign reserves are required by businesses in order to purchase goods from other countries. Furthermore, central banks must maintain foreign currency reserves in order to preserve liquidity, stabilize markets, and hedge against inflation.

As a result, the Forex market is a colossal hub of activity. And it is because of these activities that it remains open 24 hours a day, five and a half days a week. Surprisingly, this is never seen in any other financial market. The New York Stock Exchange (NYSE) is only open Monday through Friday from 9:30 a.m. ET to 4:00 p.m. ET, i.e. just for a brief period of time!

The Forex market's unique feature of being open practically constantly implies that you can easily fit your active hours into it. That is, whether you are a student, a home executive, or a business executive, you may find a moment that works for you to enter the Forex market. Many part-time traders have been able to trade throughout the market's various open hours while maintaining their regular employment and commitments.

Furthermore, regardless of the technique you employ to engage in it, whether it “scalping,” “swing,” or “position trading,” the Forex market is large enough to support it.

Profit Potential Is Endless

The Forex market has an infinite earning potential. That is, there is no limit to the amount of money you may earn in the market. It provides a great trading environment with several prospects for profit. It all comes down to your knowledge, risk and money management, and the reliability of your trading method.

Add to it the fact that this benefit is available despite the modest capital need. You don't have to spend a lot of money to earn a lot of money. There are tales of Forex traders who have grown their little accounts into six-figure sums. Few outliers, like as George Soros, the “Man Who Broke the Bank of England,” have amassed fortunes in the billions.

If you start trading Forex with $250 and your method has a 60% success rate, it indicates that 6 out of every 10 transactions will result in a profit. So, if your weekly aim is $600, you may simply execute 10 transactions every week, each with a $100 projected gain. You should be able to meet your profit target at the conclusion of each week.

Notably, the Forex market is the only financial market in which you may profit regardless of market direction. For example, if you believe the EUR is going higher, you just purchase it and profit. And if you believe the value will fall, you will merely sell it and lose money. You may argue that you can earn money in a negative stock market as well, but you would agree that the approach is simpler in Forex.

Finally, aspirant Forex trader, the sky is not the limit. It will serve as a starting point for you. Even if your goal is just to make some additional money from Forex, it has the potential to turn into a source of large earnings if you take the time to study, practice, and become really skilled at it.

Transactions are inexpensive.

Before you can trade Forex, you must first choose a licensed Broker. The Broker will act as a go-between for you and the market. When you submit a purchase order, it connects you with another Trader who is looking to sell. Similarly, if you wish to sell, your Broker will look for another Trader who wants to purchase. As you would think, this is a service with a cost.

Transaction costs in Forex are the expenditures you experience when you conduct transactions. They are the commissions and spreads levied by your Broker in exchange for its services. A commission-based Forex broker generates revenue by collecting flat fees. For example, regardless of market circumstances, such a Broker may charge a commission fee of $5 each transaction.

Most Forex Brokers, however, charge with spread, which is the difference between the bid and the asking price, the price at which you can buy and sell the currency pair respectively. For example, if the EUR/USD is 1.1042/1.1044 (bid/ask price), that means that the broker will charge a spread of 2 pips. Depending on the type of account being traded on, this can translate to different amounts.

For example, if it is a standard lot-size account, on which 1 pip equals $10, that will be just $20. This is called a fixed spread. The spread can also vary depending on the discretion of the Broker, the particular currency pair being traded, and the prevailing conditions of the market.

Inactivity and withdrawal fees and interest rates are other transaction costs that Brokers can charge.

These fees, you must note, are important because they can eat deep into your net return. However, the good news is that in Forex, they are kept low, enabling Traders to be able to keep as much money for themselves as they earn.

Leverage

If there is a feature that makes Forex trading as lucrative as it is, it is leverage. Leverage is an arrangement whereby Brokers allow their Traders to control positions far larger than what they normally would. So, it is a provision by Brokers that enables Traders to execute volumes larger than what their limited trading capital would allow.

However, your profit potential using leverage is still subject to the lot size you use. For explanation, there are four lot size types:

• Standard Lot Size: A standard lot size account is made up of 100,000 units of the base currency. The value of a pip on a currency pair quoted in dollars is $10.

• Mini: A mini lot size account consists of 10,000 units of the base currency. When trading a mini lot, one pip of a currency pair denominated in the USD is equal to $1.

• Micro: 1,000 units of the base currency make up a micro lot size account. A one-pip change equals $0.1 when trading a micro lot.

• Nano: Nano lot size accounts contain 100 units of currencies each.

Here is where it gets interesting. For example, if you use a leverage ratio of 1:100 on a $500 account, you will be able to control $50,000 ($500 × 100). Next, you might want to decide on your risk percentage, representing how much of your account equity you will be comfortable risking on each trade. A risk percentage of 5%, for example, will translate to $50 per trade on your $500 account.

With leverage, you can control so much with so little. This is one of the awesome benefits Forex trading offers. However, you should learn to use it reasonably because it can undermine your return as much it can enhance your profitability.

Innovativeness

The Forex market is not static. It moves every day. It also moves, with more innovative solutions being provided every day. This notable characteristic of the industry has made it attractive to the public, resulting in an ever-increasing number of participants and overall coverage.

For example, the Forex market used to be an exclusive playground of Institutional Investors who had state-of-the-art technologies to analyze and monitor it. Those “whale” of Investors employed the best minds and the tremendous financial resources at their disposal to develop those tools, which were available only to them. Retail Forex Traders were once barely in existence.

However, that has changed in recent years. First, the internet has democratized everything. Now, Retail Brokers are available for ordinary individuals to create Forex trading accounts with. Now, almost anyone, provided they have an internet-enabled device, can participate in the Forex market.

Besides the internet, there are innovative products that are peculiar to the Forex industry. There are charting tools, automated trading systems (Expert Advisors), and other market analysis tools that have become integrated into the Forex market. The innovativeness of the industry guarantees that more and more will be added with time.

All these novel tools easily make Forex the best and most convenient financial instrument to trade. Get into it today, too, and start taking advantage of its wide array of innovative products.

No Analysis Overload

Do you know why you should start trading Forex in addition to other quality financial assets to generate extra income？ It is super-duper easy to do! You do not have to do too much analysis before you can earn profits trading it. You can just concentrate on a few currency pairs or one and make it the mainstay of your trading. So, even if you do not have a lot of free time, you can keep your Forex trading business going.

However, the same cannot be said of all other asset classes. Let us contrast Forex with stocks, for example, The stock market, indeed, offers a wide range of investment options. There are thousands of mutual funds and exchange-traded funds (ETFs) from which to pick. The New York Stock Exchange (NYSE), the largest stock market in the world, has approximately 2,800 listed companies.

So, if you want to invest in stocks, you will have to do proper analyses to discover the best ones to buy and the ones you should sell. Think about it. How in the world will you be able to make the best decisions in such a situation？ How？ Many Brokers find it daunting to stay abreast of every one of those companies!

Trading in the Forex market will take care of that for you. You do not have 2,800 currencies to analyze. Instead, you can decide to stick to just one, two, or three and still be able to generate a decent extra income for yourself. So, why would you ever want to trade any other financial instrument apart from Forex？

Tax Advantages

If you want to generate an extra income and you are looking at trading, then tax should be one of your major considerations. The reason is not far-fetched: tax can have effects more devastating than transaction costs on your account. Even when your trades are profitable, tax can eat substantially into your gains.

Making profits everyday trading is exciting. You will be generating the extra income you have set out to. However, if you cannot adequately shelter that income, you will be charged capital gains tax on all your trades that you held for less than a year. The good news, though, is that there is a tax advantage in Forex trading which is absent for other financial markets.

Forex trading will allow you to keep most of your gains. In fact, despite that your trades will all be under a year, only 40% of your profits will qualify for short-term capital gains tax while the remaining 60% will be taxed lower as long-term capital gains. In stock trading, you will pay more in tax! For comparison, imagine you have a profit of $20,000 from your stock trades. If you are in the 35% tax bracket, your tax on the $20,000 profit you earn is estimates to:

• $20,000 × 35% = $7,000.

• A whopping $7,000!

• However, if it is Forex, the calculation could look like this:

• $20,000 × 40% = $8,000.

• $8,000 × 35% = $2,800. (Your Short-Term Capital Gains Tax) $20,000 × 60% = $12,000.

• $12,000 × 15% (Long-Term Capital Gains Tax Percentage) = $1,800. (Your Long-Term Capital Gains Tax)

• Total Capital Gains Tax: $2,800 + $1,800 = $4,600.

Thus, Forex trading potentially allows you to keep more of your gains than stock trading does. So, if you are looking for the financial market that could allow you to keep almost all your generated returns, is it Forex. Please note that TAX laws vary from country to country and are subject to change. Always consult a regulated Broker and your registered Accountant or TAX Specialist for informed expert advice.

Risk Protection

Earlier, we discussed leverage. We also pointed out how it is the feature that has made Forex trading so lucrative. Additionally, we also pointed out its risks. Leverage can burn as much as it can soothe. Every Forex loser is a product of inadequate knowledge, greed, mismanagement, incorrect advice or guidance. As a result, we encourage it to be used reasonably.

But of course, there is a solution to every Forex problem/challenge. Even when you take highly leveraged positions, you can choose to protect them using a stop-loss strategy. That is, you can potentially guarantee the fulfillment of the exact price at which you determine to enter a trade and the exact price at which you want to exit. Participants of the Forex market appreciate this feature a lot.

A stop-loss order is a provision made available in Forex trading to cap the risk to which you expose yourself in every position you take. When you specify a stop-loss order on a trade, you are essentially instructing your Broker to exit the trade as soon as the price drops to a stipulated price.

And your Broker will do that. Once that price is reached, your position will be stopped and your money is protected. So, you see, despite how risky leverage is, stop-loss is an arrangement that ensures that you are hedged against its risks. Evidently, from this, it is only those who are poorly informed about Forex that will seek to dissuade others from participating in it just because of leverage. Forex Traders who benefit in terms of gains, first invest in their knowledge before they trade. Yes, losses to teach valuable lessons!

In an actual sense, in extreme market conditions during events such as economic and geopolitical announcements, there are usually drastic price swings. In the stock market, it is not unusual to experience “slippage” during those times. “Slippage” is a scenario whereby the price entered by a Trader differs from the price at which his order is filled. However, such an occurrence is rare in the Forex market. And if you make it a personal principle to always use a stop-loss, you can be sure that the odds are potentially stacked in your favor.

Diversification

There are so many investment products being peddled around. While some are legit, many are not. And the sad thing is that so many people fall for the latter. Legitimate investment options include stocks, mutual funds, exchange-traded funds (ETFs), bonds, and other similar products.

Illegitimate investment products, on the other hand, are Ponzi schemes, in certain cases binary options, high-yield investment programs, and many offshore investment schemes. Sadly, legal investment products can also become victims of fraudulent schemes. Take the legendary “pump” and “dump” scheme of stocks as an example, a fraudulent practice whereby the price of a security is artificially inflated through misleading information so that it can be bought cheaply and sold at a higher price.

The advantage of trying out multiple investment products is to further diversify risks. However, you must opt only for legitimate options. Also, you should know these too can be subjected to fraudulent manipulation. With that in mind, you should, therefore, seek to objectively evaluate the available legitimate financial products in your bid towards the creation of an alternative source of income.And you will find that Forex stands out. It is an asset class that enables you to diversity with the potential to reap maximally from your efforts. With it, you can beat the performance of every other financial product, of every other financial market. To boost your profitability, for example, our preferred Brokers offer, high-quality signal service.

Periodically, the service provider will be sending trade recommendations for you to execute. These will specify the particular currency pair to trade, the specific price to enter and exit, and, of course, a stop-loss order to reduce your risk and protect your funds. Never trade with money you cannot afford to lose!

So, if youre looking for a tradable financial product that will allow you to reap at two ends, allowing you to diversify while also capping your risks, is it the Forex market.

Conclusion

There you have it, 12 reasons to start trading Forex as a source of income. Indeed, the Forex market is the most versatile of all the financial markets. It is very easy to participate in, the capital requirement is low, and in a short time, you could enjoy huge success. However, be warned: no matter how adventurous you are, use the provisions of Forex, such as leverage, responsibly. To succeed at all, you need to be in the game for the long haul. But irresponsibility and greed will not be of help in that regard.

Diversity-e Smart Trade College (Pty) Ltd, our Employees, Sales Executives, Resellers and/or Contractors are not registered financial services providers and are not licensed to give any financial- and or investment advice. We do not manage any monies for investment purposes. Past performance does not guarantee future growth.

Invest in your knowledge by surrounding yourself with Expert Coaches and Mentors who are reputable, has social proof, and are voted the Best Education company and Best Performing Broker in Africa.

Top 10 Best Forex Brokers

FXCC

• Min. Deposit: No minimum deposit

• Max. Leverage: 1:30 | 1:500

• Trading Platforms: MT4

• Regulation: CySEC, VFSC

TMGM

• Min. Deposit: 100 US$

• Max. Leverage: 1:30 | 1:500

• Trading Platforms: MT4, MT5, IRESS

• Regulation: ASIC

Eightcap

• Min. Deposit: 100 US$

• Max. Leverage: 1:30

• Trading Platforms: MT4, MT5

• Regulation: ASIC, SCB

FBS

• Min. Deposit: 1 USD

• Max. Leverage: 1:30

• Trading Platforms: MT4, MT5, FBS trader, CopyTrade

• Regulation: CySEC, IFSC, FSCA, ASIC

Axiory

• Min. Deposit: 10 US$

• Max. Leverage: 1:777

• Trading Platforms: MT4, MT5, cTrader

• Regulation: IFSC, FSC

HotForex

• Min. Deposit: 5 US$

• Max. Leverage: 1:30 | 1:1000

• Trading Platforms: MT4, MT5

• Regulation: CySEC, FCA, DFSA, FSCA

Pepperstone

• Min. Deposit: 200 US$

• Max. Leverage: 1:30

• Trading Platforms: MT4, MT5, cTrader

• Regulation: ASIC, FCA, DFSA, SCB, CMA, CySEC, BaFIN

FPMarkets

• Min. Deposit: 100 US$

• Max. Leverage: 1:30

• Trading Platforms: IRESS, MT4, MT5

• Regulation: ASIC, CySEC

Blackbull Markets

• Min. Deposit: 200 US$

• Max. Leverage: 1:500

• Trading Platforms: MT4, MT5

• Regulation: FMA, FSA

BDSWISS

• Min. Deposit: 100 US$

• Max. Leverage: 1:30 | 1:500

• Trading Platforms: MT4, MT5, BDSwiss Webtrader and Mobile App

• Regulation: CySEC, FSC, FSA