Foreign exchange trading is considered one of the most profitable professions across the world. Any forex trading course would tell you that once you become an accomplished forex broker, you can very easily gain financial independence within a short time. A recent Forbes article showed that the daily turnover of the forex market was 6.6 trillion dollars by mid-2019.
But forex trading or brokerage is also dependent on
the markets. Therefore, sudden market changes or world events like the pandemic
have a huge impact on the way on the prices of currency pairs and subsequently
the profits that can be earnt through forex trading.
The question then becomes: is it a good idea to become
a forex broker in the first place when there’s so much uncertainty?
Let’s find out!
What are the benefits of forex trading?
Too many to count in this short article! Forex trading
can be a great profession for people with a penchant for financial figures who
want to earn good money. Here are the prime benefits of becoming a forex trader
1. Immense flexibility in schedule and geographical
location
2. Ability to be your boss
3. A chance to experience dynamic career highs
4. Ability to profit from sudden market changes
5. A chance to gain financial independence quickly
How are you likely to generate income as a forex
trader?
As a forex trader, you have several alternatives for
making money. You can be a direct trader by buying currency pairs yourself and
selling them to other customers. However, this method is rather passive, and
there’s usually a limit to the amount of money you can make this way.
Another way is to become a forex broker and charge
fees or commissions for facilitating trades on your clients’ behalf. Your
trading volume fees would depend on the currency pair values and your financial
goal. A reasonable estimate would be around %5 for every $100,000 of forex trading
volume.
This technique has its advantages and disadvantages.
The primary benefit is that you can potentially earn thousands of dollars in
commission for a single trade since most of your clients would be big firms and
businesses. However, it can be that much difficult to land a wealthy client in
the first place.
Another way forex brokers make money is through
spreads—the difference between the purchase price and sale price of the
currency—instead of commissions. Forex brokers can offer way tighter spreads as
compared to conventional banks and pocket the difference every time some
exchange currency.
Is it worth becoming a forex broker? What if the
income is uncertain?
It is a common myth that the forex brokers and traders
have completely uncertain income cycles and go without earning anything for
months together. Most forex brokers are relatively immune to crisis periods
because they act as intermediaries between private traders and financial
institutions.
Thus, becoming a broker is more viable for being
balanced in the face of economic fluctuations and crises.
Start looking for appropriate forex brokerage courses today to become a successful forex trader.
