Author: Chris Miles

How To Smash A Side Hustle In Forex Trading

Forex trading can seem like a full-time occupation, but the truth is, most people fit trading in around their day job. With some research and practice, it’s perfectly possible to complement your salary with some significant returns from a side hustle in forex trading. Think this sounds too good to be true?  Here’s how to make it happen!

 

Make sure you know the basics

If you are a total beginner, then it’s a good idea to set up a demo account to get some practise in, and make sure you have got to grips with the basics of the game. You don’t need any specialist equipment besides an ordinary desktop PC or a laptop, to access a platform that provides forex instant funding.

 

If you are already competent at dealing with your personal finances, including budgeting and investing, you should find the fundamentals of forex trading relatively easy to pick up. The forex market is extremely dynamic and flexible, and operates almost 24 hours a day, making it ideal for those who want to use it as a profitable side hustle.

 

Develop the right mindset

You need to accept that the risk of loss is a part of trading, and risk needs to be managed to avoid the prospect of getting drawn into a situation that you can’t sustain financially or emotionally. Trading within a limited time frame means that you will have to make quick decisions, so it’s important to be psychologically prepared for the challenge.

 

You need to learn how to manage the natural human emotions of greed for greater profits, and fear of losses, to avoid being drawn into subjective, rather than objective decisions. There’s plenty of material both on and offline about the psychology of trading, so it’s worth familiarising yourself with some of it before you get going.

 

Understand leverage

Leverage is a finance provided by brokers to traders, which allows you to buy currency lots for a fraction of the cash represented in a lot. High leverage is available for forex trading, which is normally expressed as a ratio.

 

For example, a ratio of 1:1000 means that you can trade with just $100 for an investment of $100,000. To trade with a 1% margin, you would need $1,000.

 

As you can see, high leverage can substantially increase your profit potential, but it needs to be understood and used wisely to minimise losses. Start small, risking just 0.25% or 0.5% of your total capital per trade at first. Some funding platforms will charge a fee for leverage, so make sure you are familiar with the terms and conditions before signing up.

 

Commit yourself to a strategy

It does take more than the occasional dabble to make forex trading worthwhile, so it’s important to work out your strategy and stick to it. If you have a full-on schedule, you’ll have to do some juggling so that you have a few hours spare at the weekend or in the evenings.

 

Keep a track of your gains and losses as you go along, to give you an insight into what is working and what isn’t. This will help you to refine your methods. Some traders even do something called ‘backtesting’, which is a process of reviewing historical data to see which strategies work and which don’t.

 

Set yourself realistic goals, and know how much money you are prepared to risk losing with each deal. This means reviewing your outgoings and income, and working out how much disposable cash you can stand to lose without threatening your ability to pay essential bills, or damaging your savings account too badly.

 

Identify peak trading times

Because forex markets are open around the world on an almost 24/5 basis, it’s easy enough to fit trading in around your scheduled work hours. However, it’s important to note that the markets are more active at some times of day than others.

 

Research the most optimal times of day which fit into your available trading hours, which will probably be early morning or later in the evening. The markets for the major currencies are generally most active at the beginning of the day.

 

Use US Dollars as a trading pair

Beginners are advised to use US dollars (USD) as one of their trading pairs, as this is the most readily available and frequently traded currency of all. For a new or part time trader without the time or experience to study the markets carefully, trading the USD with the Euro (EUR) or the British pound (GPB) is advised.

 

Other pairs that can be traded relatively easily include the USD/JPY (Japanese Yen), USD/CHF (Swiss Franc), USD/CAD (Canadian Dollar), and USD/AUD (Australian Dollar).  More exotic currencies from emerging markets are best left for more experienced traders, as they are prone to greater volubility and carry a higher risk of making losses.

 

The time of day you are available to trade will also influence your choice of currency pairs. For example, the best time to trade for the major London, Tokyo, and Sydney stock markets is when they open at 8am UTC.

 

Risk tools

Even experienced traders will use tools to put a ‘stop loss’ on their account. This puts an automatic stop to trading when the value drops to a certain level below the entry price. This is a common risk management strategy, which prevents heavy losses in a fast-moving climate.

 

Learn as much as you can

Forex trading is a steep learning curve, but it is perfectly possible for anyone who is prepared to put in the work to make it a lucrative part time occupation.

 

This will happen faster if you keep up with the broader factors that influence the currency markets, such as geopolitical events, the unemployment rates of particular countries, and the level of demand for particular commodities produced by individual countries.

 

Many people find that joining online forums and communities is a great way to learn from others who have already learnt from their mistakes! You will also be able to post questions yourself if you are curious about something. This can be helpful, but be aware that most users will be posting anonymously and not everyone will be providing correct information.

 

Strike a balance between getting practical experience of trading, and learning as much as you can from forums, books, videos, courses, and trade journals. Focus on the currencies that you want to trade in, and learn how to analyse their movements. Also read as much as you can about risk management strategies, as this is crucial to successful forex trading.

 

There is no single strategy or formula for success in forex trading, but over time, you can hone your instincts and knowledge to mitigate the risks and maximise the potential. The more prepared you are, the better your results will be. Becoming skilled in trading takes time and patience, and it is always better to take small steps that can easily be reversed.

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How To Figure Out Your Risk Tolerance

The forex market is an active and liquid market, with the potential to bring excellent rewards for traders. Over $6.6 trillion of trade volume is achieved per day, so there is no shortage of opportunities to make substantial profits. However, this flexibility also comes with a certain amount of risk, which needs to be understood.

 

When it comes to successful trading, establishing your risk tolerance is one of the key strategies. Here’s a look at what risk tolerance means in relation to forex trading, and how to determine what your personal risk tolerance is. A well thought out strategy will make you more confident and capable of balancing risk and reward in your trading.

 

What does risk tolerance mean in forex trading?

Risk tolerance in trading means the degree of variability that you can stand financially in your investment returns. In other words, you need to ask yourself what is the maximum amount of money you are willing and able to lose in each deal?  This will be an individual choice, depending on your personal circumstances.

 

What’s your level of trading experience?

If you’re reading this, it’s likely that you are new or just making your first forays into forex trading. Therefore, it makes sense not to throw yourself in at the deep end. Start off small, with a low-risk program, or even a demo account, and find your feet.

 

Most newbies tend not to risk more than 1% or 2% of their total capital per trade until they have more experience under their belt. This means that if you were to start with $10,000 in your account for example, and were to set a maximum loss allowable of 1%, you would never end up losing more than $100 per trade.

 

There will be plenty of time for the more strategic manoeuvres further down the line, so you don’t need to take any serious risks at this point. Remember that profits tend to come to those who manage risk carefully. Study the strategies and psychology of forex trading to help sharpen up your skills, and you’ll soon be ready for the big time.

 

How much capital do you have to play with?

To take any managed risk with your investment, you need to ask yourself how much disposable income you have to play with. That is, what percentage of your earnings or savings are available to you, after your bills, mortgage, taxes, and all your other outgoings have been paid out.

 

To test this out, ask yourself what percentage you are happy to risk, and comfortably go about the rest of the day without monitoring the situation like a hawk.  It is likely to be an amount which won’t threaten your ability to pay for essentials such as food, housing, and energy, or eat too drastically into your holiday fund.

 

Find out the amount you’re willing to lose, based on an honest and realistic assessment of your financial circumstances, and don’t go beyond that. It can be tempting to push yourself over your limits, because greater risks reap greater rewards in forex trading, but this is a dangerous path to tread if you are going to end up with unpayable debts.

 

Be consistent with your risks

It can be easy to be lured into a false sense of confidence with the first flush of success, and increase your positions, or take larger positions, but this is a classic rookie error. Take the attitude that a loss may be just around the corner, and don’t let a run of profits alter your risk management strategy.

 

Remember that the forex markets are extremely dynamic, and the wheel will soon turn, whatever the current situation may suggest. Therefore, becoming overambitious too soon in your trading career is never a good idea. Be strong, and maintain a consistent approach if you want to see the best results.

 

Keep up with your positions

Check up with your positions at the end of each day. Depending on what platform or app you are using, this may be automatically displayed for you. It will let you know if there are pending positions, and how much available cash you have.

 

Learn to read the market

Make sure that you are familiar with forex trading terminology, and keep on top of the forex news. This means you will be able to anticipate how the market will behave. The demand for currencies is influenced by geopolitical events, tourism activity, the economic buoyancy of a particular country, interest rates, and many other factors.

 

The forex markets fluctuate on a daily basis, and obviously, a weaker currency means there is always a stronger currency to profit from somewhere. Currencies are traded in pairs, for example, the EUR/USD (Euro/US Dollar) and the USD/GBP (the US dollar and the British pound).

 

Currency pairs that are not associated with the USD are known as crosses, or minor currencies. The currency pairs of emerging markets are known as exotic pairs. New traders will not usually invest in emerging markets, as although they often experience fast growth, they can be unstable, and less well-regulated than advanced economies.

 

Pay attention to commodity prices, as the strength of a currency is linked to the major commodity exports of a particular currency. For example, the New Zealand Dollar (NZD) is strongly linked to the price of wool and dairy products. When the demand for these products rises, the cost will rise and the currency will strengthen.

 

The Canadian Dollar (CAD) is heavily correlated to the volume of oil exports for that country, and the Australian Dollar (AUD) is linked to the price of gold and iron ore. A ‘Bear Market’ is a term used to describe a market where all currencies are on a downward trend, usually as a reaction to disruptive geopolitical or environmental events.

 

A Bull Market on the other hand is when events take a more positive turn, and as a result economic confidence rises, leading to an upward trend in currency prices.

 

Learn about the psychology of trading

Of course, you need to know the technical nuts and bolts of forex trading to be successful. However, it is just as important to be aware of the psychological investment you are making. You will need to be able to make good decisions in a short timeframe, and manage your emotions.

 

Good traders look beyond their gut reactions, in order to remain objective, and gain a competitive edge over their rivals. Making quick decisions and thinking on your feet can lead to subjective responses, so you need to fine tune your thinking and overcome this natural human tendency.

 

Dealing with profit and loss margins naturally creates a fear of losing, and a greed for greater profits. However, being in thrall to these two emotions can lead to serious mistakes. Swift reversals in market trends can catch out those who try and push profits to a maximum, while the overly cautious will struggle to make progress.

 

This is where your risk management strategy can help you out. As we have discussed already, you need to know what your risk tolerance is from the outset.  This will act as a built-in check and balance system, and prevent you from losing unmanageable amounts of money. A new trader might set a limit of 1%, for example.

 

Broaden your knowledge base

As we have also discussed earlier, you can gain more insight and expertise into forex trading by researching and studying the markets. This will lend a greater depth and foresight to your decisions, allowing you to see beyond temporary glitches and spikes, and develop an eye for the bigger picture.

 

Therefore, keep up to date with the financial press, including trade journals, and speak to people who work in the sector if you can. Forex trading is strongly driven by macroeconomics, which means the economy as a whole, rather than individual behaviour. Current affairs, such as political decisions, can influence the economic health of a country.

 

The forex market depends on the balance of trade between nations. If a certain commodity is in high demand, then this will strengthen the currency of the country which produces it. This is because foreign buyers must convert their currency into that of the country they wish to purchase the goods from.

 

Develop an understanding of the factors that drive economic growth and decline around the world, in order to keep up with the complexities of forex trading.

 

Accepting risk

Finally, it is important to accept that risk is all part of trading, and that losses are not failures; even the most experienced of traders sometimes make losses. However, by careful risk management, you can learn how to stack the odds in your favour, and minimise your level of risk.

 

Financial trading without a risk management strategy removes any control from the situation, and is basically the equivalent of gambling. By learning how to gauge your personal risk tolerance, you will increase your skills as a trader, and also prevent yourself from ending up in a precarious financial position.

 

If you are looking for instant forex funding, talk to us today.

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OVER 10% PROFIT IN 1 TRADING DAY!

https://youtu.be/ni5N9UQh0N4

We recently had one of our traders making over 10% profit in one single trading day enabling them to reach level 2. 

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DAVID HAS MADE 10% PROFIT IN JUST 2 DAYS!

https://youtu.be/pC2dKmc8jag

One of our latest traders, David has recently hit the first profit milestone in just 2 days! We take a brief look at his performance.

How long have you been trading?

1 year 2 months

Why did you choose us?

Recommended by a friend

What has been your experience with us so far? 

Good impression so far

What is your main trading style?

Swing and scalp

Do you have a trading plan in place? 

Yes, I have an excel I write in

What would you say to other traders with FTUK? 

Trade simple and constant

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Reduce losses in your trading

How Not To Lose Money When Forex Trading

 

When it comes to playing the financial markets, forex trading will always be a very popular option because it’s easy to get started and there are very low margin requirements – so you can get going pretty quickly with small amounts of capital and start bringing home the Benjamins.

 

But, as much as it’s true that there’s a lot of money to be made, there’s also a lot of money to be lost… and you’ve got to be prepared for this, putting in the hours so you can mitigate the risks but also preparing yourself mentally and emotionally for those inevitable financial hits.

 

Celebrate the wins, yes, but learn from the losses and try not to take them to heart. It’s all a learning curve, after all, and the losses will help you improve your trading game… even if you can’t see it at the time.

 

That being said, it also makes sense to do all you can to avoid losing money when FX trading. After all, the game is all about making money at the end of the day – so here are some top tips to help you keep your hard-earned cash where it belongs… in the bank!

 

#1

Practise, practise, practise

 

As with anything, the key to success is practice when it comes to foreign exchange trading so find yourself a demo account and start placing those hypothetical trades. This will really help you improve your entry order techniques and strategies (those you use to enter a trade at a specified price level).

 

This can be pretty complicated because there are so many variables that affect the forex market, so practising when you’re not financially invested can help you work out what you need to do and when without any added pressure.

 

Making mistakes with entry orders can result in big losing trades and it’s really common for new traders to accidentally add losing positions instead of closing the trade – all by pushing the wrong button by mistake.

 

When you suddenly see a big loss, your confidence will take a hit and your stress levels will rise… and trading is all about keeping a cool head, no matter what happens – which is why practice is so very essential and something that all the most successful traders will no doubt have done, as well.

 

#2

Start off small

 

Of course, it’s tempting to go all in when you first go live as a trader. That’s where the excitement lies, after all. But, even with all the practice in the world, things can still go wrong and you’ll still be relatively new to the trading floor so be sensible when first starting out and don’t put everything you have on the line.

 

Real trading has a very different feel to it than when you’re in the practice room and you won’t gain a full understanding of how emotion can impact your actions until you’re trading live.

 

You may also find that your trading plans and strategies just aren’t as effective in the real world as they were when using your demo account, so starting small can help you evaluate everything and really see where you’re going wrong and what you can do to rectify it, without risking your entire trading account.

 

#3

Focus on money management

 

It might seem boring and arduous, but effective money management is an absolute must if you’re to see real success as a trader. Losses are absolutely inevitable, so it’s important to monitor your positions constantly and take the hits when they happen.

 

You can control the risks through stop losses, an order type designed to limit the losses from a trade. This means you can be wrong numerous times and still retain the majority of your equity – and this is certainly a better approach than having to learn a few harsh lessons when your finances seriously suffer.

 

You can manage your money either by implementing lots of small stops and then trying to rake in profits from a couple of big wins, or you can opt to take infrequent bigger stops and try to make smaller gains that build up over time, in the hope that these will outweigh any of the larger losses you see.

 

#4

Trade less

 

Overtrading is very common among FX traders. The thrill and the excitement of it all keeps you coming back for more time and time again, and before you know it you’ve amassed some serious losses… all because you couldn’t restrain yourself.

 

Work smarter, not harder, so they say – and this is a great rule of thumb to bear in mind when trading currencies. Experienced traders may well see consistent profits over time, but taking on too many trades generally only leads down a dark path and you’ll spread yourself too thin, which will have an inevitable impact on your profits.

 

Increasing profit is basically just about reducing and preventing your losses – and one of the best ways to go about this is to trade less frequently.

 

#5

The trend is your friend!

 

This is a really popular trading expression and one you’re sure to hear bandied about when you start trading yourself. Trends are simply prolonged movements in the market in one general direction – up or down.

 

For traders, this means that price responses can become predictable at levels of support or resistance, which change over time – and you can use trend analysis to look at what took place in the past to gain an idea of what’s going to happen in the future.

 

However, your successes and failures where trends are concerned will depend on one thing – understanding that the trend will end at some point. You’ll never know how long they’ll last and the key is to learn how to identify them early on so you can take advantage sooner rather than later… and so you can get out again without sustaining any losses.

 

#6

Trade one strategy at a time

 

Of course, it’s tempting to want to try out all sorts of different strategies at once but, again, you’ll spread yourself too thinly and it will be harder for you to track and see what’s working most effectively.

 

It makes more sense to pick one strategy and really get to grips with it, before trying something new. You’ll see greater success with this approach and you’ll reduce your risk of blowing your entire trading account.

 

#7

Preserve your trading capital

 

Playing a strong defensive game is essential for any successful trader, so make sure you preserve your capital, as this will keep you in the playing field for longer. If you run out of money and can’t trade, you’ll never win big.

 

#8

Learn to interpret forex news

 

Markets move because of what happens in the news, so learning to interpret what’s taking place – especially where economic data is concerned – will help you see what you need to do and when. Naturally, it’s not quite as simple as that and you may find it harder to interpret trading news than you at first thought, which can lead to losses if you’re not careful.

 

Watch out for reported consensus figures, as well as whisper numbers (unpublished and unofficial forecasts) and any changes to previously published reports. And remember – not all reports are created equal. Some will have a bigger impact on others… so there are a lot of factors at play and it can be quite confusing for novice traders.

 

#9

Don’t get cocky!

 

It’s important to be confident, yes, but overconfidence can be a real killer. Overconfident traders often find themselves opening too many positions and taking positions that are too big – which ultimately will lead to their downfall.

 

Emotions can be tricky to manage when you’re trading but you need to be able to control them, or you could find yourself in dire financial straits if you’re not careful. So, even if you have seen a series of big wins recently, keep a level head on your shoulders and don’t get carried away. The game will change soon enough.

 

#10

Do your research

 

You can’t expect to just jump into the wonderful world of forex trading and understand what’s happening right off the bat.

 

You’ll need to read up on and research all sorts of different theoretical notions and strategies first, as well as familiarising yourself with all the different terms and lingo that get thrown around. You’ll feel like a fish out of water at first, most likely, but sooner or later you’ll be one of the sharks – as long as you put the hard graft in at the beginning.

 

Sign up to one of our forex funded trading programs today. You can trade when you like, where you like, with instant access to live funds.

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When it comes to playing the financial markets, forex trading will always be a very popular option because it’s easy to get started and there are very low margin requirements.

 

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