How To Get Started in Trading Forex as a Sideline

Estimated reading time: 5 mins

Whether you have a full-time job or run a business, it can always be a nice idea to do something else on the side that can generate a secondary income stream. If you have some capital that you are interested in trying to maximize as a sideline to your main work, one option a lot of people find appealing in trading. Naturally, any kind of financial trading does not guarantee a profit, by its very nature, but by developing your trading skills, it can be an interesting and rewarding hobby, which can also sometimes pay off in financial gain.

There are lots of different styles of financial trading that can be done online, including stocks and shares, futures, contract for difference (CFDs), and forex. Forex is one of the most common choices for people who want to trade regularly as a sideline to working for a number of reasons, which we’ll look at here:

Why is Forex a Good Choice for Part-Time Traders?

Forex has one very big advantage over trading stocks and most other assets, and this is that the market is global. You can trade at almost any time of day or night rather than needing to be constrained by market opening and closing times. In practice, apart from part of Sunday, this means that wherever you are in the world you can plan trading sessions at times that suit you. This makes it a convenient option for people who cannot commit to trading during standard business hours due to their work.

Another reason why forex is well suited to people looking at trading on the side of other work or business venturesis that it can be a lot easier to keep track of what is happening on the markets than with stocks and commodities. This is because currency price fluctuations are usually a result of macroeconomic factors, so you only need to be concerned with the economic calendars pertinent to your chosen currency pairs and the events in the respective countries. This can be far less time-consuming than keeping tabs on individual business or industries and can also be easier for new traders to understand, as most people have some familiarity with current affairs already.

A third reason why forex can be a good choice of sideline is that it is easy to get started and there are plenty of platforms you can choose from, most of which include mobile apps you can use to trade on the go. Once you have an account, it can be easy to manage it and make real-timetransactions, as well as access analysis tools.

What Do You Need To Learn Before You Start?

The first thing you need to do if you are serious about starting to trade forex is to understand how it works. You can find a lot of resources online that will help you get in-depth information about different ways of analyzing the markets and different strategies you can use. However, in order to understand these materials, you first need to learn the terminology. There are a lot of terms used in forex trading that will become second nature to you once you are ingrained in trading, but at first can seem a bit daunting. You need to understand about things like support and resistance in order to plan your trades, and you’ll also want to know what market sentiment related terms like ‘bullish’ and ‘bearish’ mean for when you are reading news related to the currencies you are interested in. You can find some useful glossaries that explain all of these trading related terms, as well as describe different analysis tools you will want to be able to use such as candlestick charts, here. You can also find other resources designed for new traders to help them get their bearings here.

There is a lot to learn, and so don’t expect to be ready to start trading after an hour of online research. What you can do, however, if you tend to learn better by ‘doing’ rather than researching, is get a free demo account with a forex platform where you can trade with pretend money. This lets you apply the things you learn and get used to executing trades without any risk. It can be a good way to test out strategies and see what you like best, too.

Decisions to Make

Once you feel ready to start trading with real money, you will need to decide on the broker you want to use, and also on which currency pairs you would initially like to start with. Even some very experienced traders tend to stick with just a couple of pairs, so don’t feel like you have to learn about every currency in the world and be confident trading in it. Most people use their own currency against others they are fairly comfortable with, which means popular pairs tend to be things like USD and Euro, or USD and GBP. This is simply because people choose the pairs where they have the most familiarity with the news and economic situation in the relevant country, and also because the most popular pairs tend to have the most news and information available about them in English.

However, if you prefer, you can choose whatever pairs you like, including, with some brokers, pairs that include cryptocurrencies. If this interests you, it may be worth considering whether that is available when you are selecting a broker. Other factors in choosing a broker can include the toolset they offer, consumer reviews from other traders, and bonuses and incentives. You can find out about FX incentives on this website.

Forex trading can be an interesting and fun way to try and make some extra money on the side, and while there is something of a learning curve at the beginning, once you know what you are doing, managing your trades can become easy and convenient if you use a good online and mobile platform.

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