Saving and Side Hustles! Using Forex Trading Wisely

Although there is somewhat of a short-term nature regarding the Forex markets, we should always keep in mind that such a side hustle can quickly evolve into a lucrative financial strategy for years into the future. Due to recent market instability, a growing number of traders are wisely considering the ways in which they can turn their side hustle into a genuine savings plan. To clarify things a bit, let us take a look at some powerful methods to keep in mind. Preparation is the key to success with any investment.

The Rule of 30 Per Cent

Many traders who are new to the currency exchange sector could be unsure how much money they should put away after a successful trade. This can be especially confusing when the lure of short-term profits interferes with long-term goals. Naturally, every individual will gravitate towards his or her own preferences. Novices should embrace the rule of 30 per cent. To look at this concept from another angle, 30 per cent of all savings will be allotted into a dedicated account. These are not to be used for any future trades. This can help to add momentum to any side hustle.

Margins: To Be or Not to Be?

Some view margin trading as a decidedly risky venture. To be sure, losses can far eclipse the initial amount that was invested towards a specific position. The exact opposite is also very true. The benefit of any margin trade is that although the investor will only put down a fraction of the total value of an asset, the full profit can be realised if its momentum is predicted correctly. This can be a wonderful opportunity for those who may not have a great deal of spare capital. However, it is IMPERATIVE that margins be correctly understood before any such position is chosen.

Tight Spreads

The term “spread” is frequently used in conjunction with the Forex markets. A spread is the difference between the buy and the sell price. Different online brokers will naturally provide different spreads. Tight spreads below a single pip are associated with lower transaction costs per trade. This will benefit those who are executing multiple positions during a given time period. Also, low spreads such as those which are associated with CMC Markets are great ways to experiment with different trading styles. Finally, favourable spreads (such as 0.7 pips) can help to maximise the rewards offered by automated trading systems.

A side hustle does not necessarily have to be associated with an excessive level of risk. Understanding the importance of the concepts mentioned above is a prudent way to enter into the exciting world of currency trading. Still, losses within this industry are a fact and not every trade proves to be profitable. Using the services only found through CMC Markets is a powerful way to enjoy a profitable long-term stance. Smart trading requires patience, knowledge and experience. The architecture utilised by CMC Markets will help to provide such a financially bright future.

About Jen Perkins

Likes: saving money, being debt free (aside from our house), zombies, travel, getting money, blogging and dogs. Dislikes: debt, being broke, bunnies, wasting money, not having enough money to travel the world and paying interest. Facebook  ♥  Twitter  ♥  Google+  ♥  RSS

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