One of the most attractive points in forex trading is the possibility to get rid of your routine job, or at least increase your income by feeding it with regular income from trading profits.
In reality, if you are a newcomer to the world of trading, it is the big dreams, and perhaps the unreality, that feed your ambitions. However, you might have already heard of traders trying to generate additional income by trading part-time or full-time but ultimately failing.
This may lead you to wonder about the realistic chances of realizing even a small additional income from Forex trading.
To answer this question, we’ll explore some of the obstacles that can challenge success in this endeavor. We will then list some tips that will increase your chances of success in this regard.
Is this scenario possible? Yeah!
First of all, the short answer to the question “Is making a small extra income from Forex a realistic idea?” It is “yes“.
But “yes” here comes with a lot of caveats. It’s not realistic to pitch this idea as an easy task to accomplish, or that you can be successful in a short time.
It may take months or even years to build a steady income from Forex trading that you can rely on in your life. Throughout this long journey you will encounter many challenges.
If you are not ready to take it, or try to rush and take high risks, this will ruin your account faster than you expect.
Obstacles you may need to overcome to turn Forex into a reliable source of income
Here, let’s review some of the challenges that you may face, so that you can prepare the necessary plans to overcome them.
One of the main challenges in this area, which many individual traders suffer from, is the lack of adequate financing.
It is true that you can open a trading account with a relatively low deposit, and some platforms also allow you to make very small trades.
By the same token, you can start your journey in the world of forex trading with just a few hundred dollars.
But what you may not realize is that if you stick to a rational strategy that involves opening positions of adequate volumes (i.e. not risking more than 2% of your account balance), you are likely to make only very modest profits in the beginning.
You will have the ability to double your account over time, but you will have a long way to go to achieve this goal especially at the beginning of trading.
Another obstacle to success as a currency trader is the lack of time as a result of your being busy with another job.
Even trying to make a little extra income from forex is, in essence, a job with requirements like any other. You will have to put in just the same amount of effort, time and hard work as full-time traders, especially when it comes to learning to trade, monitor the markets, and create and test profitable strategies.
Setting aside enough time may not be an impossible task, but it will take some creativity.
- Schedule daily tasks
In the same context, you may face difficulty in scheduling trading tasks if you are compelled to open your trades during daily hours.
This is also not an impossible obstacle to overcome, but it will require finding a suitable way to trade during business hours or at night.
- Dispersion factors
Your focus should be at its best when planning and executing deals, but it can be difficult to keep your mind clear and make sound plans while you plan a business meeting or if you are concerned about performance appraisal reports from your boss in your day to day job.
- Energy and determination
Also, do not forget that your daily job not only requires time, but also consumes your energy and effort. Exhausting this energy and effort may make it difficult for you to maintain the focus needed to trade Forex.
Tips for making a small additional income from Forex
Now that you know some of the potential obstacles you may encounter on your way, the next question may be how to overcome them? The following recommendations may help you get the job done.
- Never leave your daily job.
You may feel like giving up your day job altogether and dedicating your entire time to trading the currency markets.
No matter what job you’re in, never take this step. In fact, having a day job at the start of your trading journey is an intrinsic advantage.
The day job will give you financial stability, and hence some emotional stability, which is essential in trading. In addition, this function will provide you with the funds you need to deposit into your trading account.
If you are constantly withdrawing money from your account to pay for rent and other household expenses, rest assured that you will fail to grow your account sufficiently.
- Choose a strategy and time frame suitable for your daily work schedule.
The advice here is to keep in mind the daily task schedule when choosing and experimenting with trading systems very carefully.
You should be able to find the system that allows you to trade without affecting your performance in the permanent job.
You can arrive at this conclusion during the beta testing phase until you are ultimately sure that you have chosen a viable strategy.
- Have patience and willpower.
The most important thing that you can do to help yourself generate additional income from Forex is to be prepared for the long haul.
You will not become a profitable trader overnight. This fact is difficult for some to accept, but the sooner you understand it, the shorter the distance to success will be.
It takes a long time to generate profits at a steady pace, but it probably doesn’t take the same time to trade in a consistent manner. You can decide to do that now.