A common ways for entrepreneurs to supplement their income is through trading, and the foreign exchange, or forex, markets tend to be one of the most popular investment choices.
Their appeal is simple to understand. Flexible and easy to gain access to, they trade around the clock, making this type of trading ideally suited to fitting around a busy work life. It’s entirely possible to invest exclusively outside of business hours, and this really sets the market apart from other fields. Additionally, many entrepreneurs relish the high stakes. Possessed of a libertine nature that’s seen them excel in the competitive world of commerce, the risk married to the chance of eye-watering profits is enough to keep them hooked.
But how do they turn these dreams of money into a reality? The answer lies in building a solid foundation to trade from, and to do so you need to focus on three main building blocks…
Number One: The Currency Pairs
The most integral part of any trading strategy is the currency combinations that an investor chooses. There are hundreds of pairings to pick from, each with a specific level of risk attached to them. It’s important to research these very carefully, in order to best identify the combination/s that complement your approach to risk, experience, and the level of profit you’re hoping to make.
Number Two: The Broker
A broker performs many roles: sometimes, they’re merely your portal to the markets; on other occasions, however, they also act as teacher, mentor, and advisor. When you’re choosing a brokerage firm, there are five main things to consider: the currency pairs they offer, the level of support they can provide, their costs, the platforms they offer, and their customer service. It’s a good idea to outline what you want in regard to these five factors beforehand, and to keep looking until you find someone that ticks all of your boxes.
Number Three: The Trading Platform
Your trading platform will provide you with access to the foreign exchange markets, and its performance will heavily impact how well you do. Most brokers will offer demo accounts, so that you can test drive their services before committing to anything. It’s always a good idea to take advantage of these. For each of the platforms you demo, try to score them based on their aesthetics, ease of use, tools, and accessibility. If there’s anything at all that you’re unhappy with, then it’s time to look elsewhere; with so many brokers and platforms to choose from, you don’t need to settle for second best.
Start building a sturdy foundation today with these top tips.
