Day after day, what can be called “temporary jobs” investment is growing, and it is one of the most effective methods of dealing with the cost of living, especially at a time when inflation continues to rise disproportionately to income. But is forex trading reliable as an effective and guaranteed secondary income source?
What is forex?
In this report, the Turkish “hazirbilgi” website answers everything related to the world of forex.
Forex – in its general sense – the currency exchange market, in which the benefit is made from the change in the exchange rate between one currency and its counterpart. Forex allows trading using leverage, i.e. depositing a small amount of money and then trading on credit. Although forex means the exchange of foreign currencies, trading is not limited to it and includes dozens of other assets, such as gold, oil and commodities.
How is forex trading done?
Trading in the forex market is very easy. The first thing you need to do is select a secure brokerage firm and create an account. After depositing the security you have selected for investment with the broker company, you can start trading directly and perform these various operations using a computer, tablet or any mobile device connected to the Internet. And you can make all transactions in the forex stock market.
Is forex safe?
The reliability of trading in the forex market is becoming more and more questionable, especially after the crash in the cryptocurrency market. The problem in the crypto market is down to the intermediary institution. And the need for an intermediary company to conduct transactions in the forex market opened the door to skepticism in this area as well.
Forex was legalized in the middle of 2011, and it has gained its reliability after that date. The audits and statements issued by the Capital Markets Board were an important factor in gaining the confidence of investors.
The pros and cons of forex trading
Your coffee break website published a report confirming the pros and cons of foreign exchange trading, in which it said that one of the advantages of the forex market is the high liquidity, especially when dealing with the required major currency pairs such as the euro and the dollar, and this means that it can be bought and sold easily in real time, making it easy to convert it into cash if needed.
This market also provides flexible trading strategies and a variety of investment tools, which enable you to target short, medium or long-term gains, and take into account your willingness to risk.
One of the risks of forex is the extreme market volatility which can cause losses and deter risk averse traders. He further notes that forex trading is complex, and there are countless factors affecting the market such as inflation, interest rates, geopolitical tensions, and trade flows between countries, which makes it difficult to plan in real time.
Is it possible to rely on forex trading as an effective secondary income source?
Forex trading is a challenging hobby and only about 30% of traders make a consistent profit, so although it is ideal for risk-hungry investors with knowledge of market fundamentals and a strong sense of determination, it is less suitable if you are risk averse and have little market experience.
The site recommends starting with learning about forex and building a broad base of theoretical knowledge before investing, while using the so-called “demo account” to hone your strategy and experience in the simulated market in real time.
You can usually use this type of account for about 6 months, as it allows you to trade without committing your hard earned money.
It is important to start with a small range by trading one or two major currency pairs, before diversifying your holdings naturally and in line with your level of profit and experience.
The site concluded the report by saying that there is no doubt that forex trading can unleash a comfortable secondary income stream for investors, but the forex market is highly volatile and not suitable for everyone.