I love HN authors, publishing, and talking incessantly about AI, Tech,Startup,Blockchain & etc.
Forex trading is a type of investment. But unlike regular investments, it shows results in less than a year – even with long-term strategies.
Comparing this type of investment with a business or a startup, for example, we realize that Forex trading is not only a safer and more reliable investment but may also help fund other business ventures.
As such, before browsing a Forex brokers listing, let’s see if you can really use foreign currency exchange to grow your business!
Before getting into the technical bits, let’s check out the main reasons why this type of trading seems so viable in terms of funding and growing a business.
When you decide to move on with a business or a startup, you’ll have to make a significant investment to get things rolling. Naturally, you won’t know what happens to your it until the business rounds up some profit or collapses. Moreover, profit will come quite late in most cases.
Given the above and the short- to mid-term implications of currency trading, it seems only natural that you could use the Forex-type of investment in order to meet the investment goals of your business.
While trading foreign currencies, you’ll encounter many types of entities – banks, regular traders, companies, and so on. The basics of online currency trading are the same as those of currency conversion (while traveling).
The traders buy and sell currency pairs at a certain rate. Then, they wait for market fluctuations that would make selling or buying currencies profitable.
As you may know, Forex trading is extremely popular nowadays. People try this type of investment at least once in their life – or even once a year, depending on global events.
Volatility – major currency pairs within the Forex market usually move at around 50-100 pips per day. This translates to high volatility – major changes in value – and can be used to win large gains. Depending on the currency pairs, a 90-pip movement can imply a profit of $900 for the trader. Medium and minor pairs pass 200/400 pips per day, but their value is much lower. Still, the room for profit exists, regardless of the currency!
High Liquidity – in short, currency trading comes with a level of liquidity that allows for almost instant trades. This also makes it easier to profit from falling markets with high liquidity, unlike with the stock market, for example.
Leverage – this is probably the most important reason why this type trading simply works. Without the leverage provided by brokers, a trade with a profit of $500 would be worth only around $10. Why? Because your currency has more power with leverage. A 50:1 leverage implies that one of everything you invest is valued as fifty, so to speak.
There are many other reasons why this particular type of trading is worth trying: accessibility, regulation, increased transparency compared to other similar markets, and very low trading commissions/fees/costs.
First of all, it is worth noting that one should never put their trust (and funds) in Forex trading. Seasoned business people are aware of this, and they don’t invest everything they have in a single thing/market – now you’re aware of this as well.
Given that the currency trading market comes with medium-high risks, it should not be seen as some golden goose that will provide instant funds for a business. However, given its fantastic profit potential, here’s how a business can benefit from such trading:
In order to earn enough money to grow a business, people will often invest in more than just one market/thing. But this comes with increased risks – so, why do they do this?
Well, multiple investment channels are perfect for preserving capital and for significant income growth. There may be more risks, but the winning opportunities are greater as well.
Starting a business requires a lot of funds. On the other hand, you can start to trade currencies with virtually any amount – even as little as $10. Stocks, for example, require a starting capital of around $1000.
This is perfect for business owners that want to work on their capital but not take too many risks. A small $100 investment can turn into $900 in profit that you can later use for other investments.
The Forex market allows you to take care of daily business operations and whatnot as well. One is not forced to check the currency market constantly, fearing that they’ll miss a good trade.
Forex markets are open 24/7 and, given their accessibility, you can set up notifications for when a currency that you want to sell/buy passes a certain threshold.
Last but not least, you need just a smartphone with an internet connection in order to enter and complete a Forex trade – nothing more!
Investing in stocks comes with a limited number of choices in terms of platforms and such. Furthermore, there are quite a lot of technicalities and requirements that you need to fulfill in order to trade stock successfully.
Currency trading is much easier than that. Traders can choose a preferred broker, a platform they’re comfortable with, and so on. Traders can choose brokers even based on commission, fee, bonuses, minimum deposits, etc.
Everything mentioned so far makes for multiple and solid reasons why currency trading can, in fact, grow and develop your business.
Statistics show that an investment of only $1000 could turn into $20,000/year in profit. Naturally, this comes the risk of bad trades. If you decide to invest $5000, you can make up to $100,000/year – but with mostly successful trades.
If you want more specific statistics, Forex traders usually make around 15% of their investment per month while taking into account losses as well.
In short, foreign currency trading does allow the business owner to earn some extra funds on the side or even small fortunes that they can use to grow a business. This is due to:
As such, Forex trading is clearly and undoubtedly one of the best ways to diversify your portfolio and potentially grow and develop your business!
Create your free account to unlock your custom reading experience.