Forex is attracting more newbies than ever, most of whom are looking to trade forex as some extra income. It’s too much of a gamble to quit your job to trade forex, but can you trade alongside your job for extra income? Let’s find out…
It is very hard to trade forex for extra income, but it is possible. It takes years to learn the skill and to see profits, and patience is the key. Even as an experienced trader, it’s hard to rely on forex trading for extra income as returns are very inconsistent month to month.
Use Forex Trading For Extra Income – Is It Possible?
Forex trading is very attractive, and the idea of trading for extra income is really appealing. The problem with forex trading for extra income is that once you start to trade, you’ll realise how hard it really is to succeed and how much time it needed to learn the skill.
Forex trading for an additional income is possible, but there are several things to consider:
– You need some serious money (at least $1,000) to get started. If you don’t have this cash reserve then your trading account will not be very effective. Because of this, it’s really hard to use forex for trading for additional income.
– Forex is not exactly the best way to earn quick cash – even if you stick with it long-term. You can expect to make quick money in forex, but this is an extremely rare situation and you need a lot of time and experience to get there. It takes years to learn to trade forex.
– There are lots of people who have lost huge amounts of cash trying out their luck with forex trading. It’s risky as the market moves very quickly, and there is no guarantee of your money’s safety with forex.
Don’t let this dissuade you from trying, but you need to be aware of the downsides!
The Best Way To Trade Forex As A Side Hustle
If you’re looking to use forex trading as extra income, this would imply the fact that you have another source of income, perhaps a job. If you have a job, then you won’t have many hours per day to dedicate to forex trading.
Due to the lack of hours to dedicate to the charts each day, the best form of trading for extra income would be swing trading. Unlike day trading, forex swing trading doesn’t require much chart time. You can instead use the time you would spend charting to complete other daily tasks.
During downtrends, the price action is often slower than during uptrends. This means you can trade forex for extra income even if your schedule only has room for swing trading. Pick a good currency pair with decent volatility and volume, and proceed to place limit orders to open and close positions.
Swing trading is done primarily on the higher time frame charts. This means that you’ll only need to spend a few minutes each day on chart analysis. You can find out which currency pairs are trending, and place trades accordingly.
Utilising different order types will also help you keep your daily trading time to a minimum. For instance, limit orders will only trigger when the price reaches a certain level. They won’t close any open trades, but they can be helpful in identifying trends and they mean you don’t need to be glued to your charts.
Why Forex Isn’t Great For Extra Income
Forex trading is not a good way to make extra income. This comes down to people being sold a dream and thinking that forex trading is an easy way to make money. The forex market has taken the world by storm, and that’s because there are millions of traders worldwide – but out of those millions only a handful actually make an income.
Forex trading is very hard and cannot really be done as just a side gig, as it takes a huge amount of time to succeed. If you’re looking for a solid way to generate an income, forex isn’t the best place to do so.
As previously mentioned, there are millions of traders – but very few of them actually make money. The forex market is extremely volatile and unpredictable, which means it’s impossible to be successful in all time frames. There will also be periods of time where you are in drawdown, so the profits generated cannot be relied upon.
Not only are the returns inconsistent, it takes traders years to learn to get consistently profitable returns from the forex markets. Even if you’re experienced, there are still risks involved.
In Summary – Forex Trading Isn’t Great As Extra Income
While it is possible to trade forex for extra cash, you need to be very careful before taking this path. Make sure that you have the required knowledge and experience necessary in order to succeed in this market.
You should also have another source of income in order to hedge your risk. If you feel that you’re ready for forex trading, you can read our top tips on how to trade forex successfully here.
Are you looking to trade forex for extra income?