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Whatever career path you may have previously followed, there comes a time for many people when the idea of working from home becomes appealing. There are an increasing number of ways to try and make money by working from home and one of these is to operate as a foreign exchange (Forex) trader. This may initially seem more complicated than, perhaps, setting up an eBay business selling your own crafts or completing assignments as a freelance writer and it’s true that this idea wouldn’t work for everyone. But, if you meet the necessary pre-conditions and fancy a challenge then this could definitely be an option for you!
To help you make your decision, we’ve compiled a summary of the basic pros and cons of becoming a home-based Forex trader.
Very little is needed in the way of physical equipment - just a laptop and internet router and maybe a desk - therefore there is very little space needed. This could make it a more attractive option for someone who doesn’t have a large home or access to the space required for, say, setting up a mobile hairdressers or storing large amounts of stock.
Other than the money you wish to directly invest on the Forex market (which is totally determined by you, but could be huge if you are hoping to use trading as your main source of income) there are virtually no start-up costs and very few ongoing overheads.
The potential is there to make significant gains. As with any form of trading, this means that there are also significant risks (see below) but your job will be to minimise these as much as possible and to spread your investments across a diverse portfolio to try and avoid big losses.
Forex trading is still quite an unusual home career and is therefore likely to be a quite a change from the rest of your daily life. For some people, it may also provide the sort of intellectual challenge (when it comes to the level of mathematical skill and the depth of research that is necessary) that other home-based careers don’t offer.
You will need capital to start trading on the Forex markets. As stated above, the amount is determined by yourself, but if you are hoping for trading to become your career then you will need to raise and invest quite large sums in order to see the necessary returns. Many people will not have access to such funds and would therefore need to build their trading career up slowly, even alongside another job, in the short to medium term.
You cannot underplay the fact that there is a significant level of risk involved in Forex trading. This is what many traders find exciting, but that excitement might disappear once it is your own money that has been invested and lost. Obviously you will be doing all you can to avoid such losses, but they will always happen at some point - even to the most successful traders. You need to think hard about how you would cope with this, both financially and emotionally, before you begin your trading career.
Traders working for big organisations operate on a trading floor, with big screens displaying up-to-date information about the world’s markets. There are also teams of people dedicated to watching the general and business news and analysing how this may affect countries‘ economies. Whilst (via the internet) you may have access to all this information at home, without a team of colleagues - as well as the informal office ‘banter’ and networking you experience in a busy workplace - you may not get such a feel for market trends just working from home.
There may well be certain time constraints, so that you are not able to be completely flexible with when you work. You might need to ensure being able to log on to the internet at certain times, linked to when the overseas markets are active, so you would need to bear this in mind if you are hoping to work from home in order to accommodate childcare or other jobs.
If all this sounds interesting, it is possible to set up practise Forex accounts online and to try your hand at trading with ‘pretend’ money before you make the capital investment required to trade on actual markets. You can also use these websites to get free advice and tutorials about Forex trading. An internet search will provide you with list of companies to try, but here are a few to get you started:
If you’d prefer to speak to someone in person and don’t mind paying for it, there are also a few training courses you could attend to find out more: