Low capital requirement and advent of online platforms has made online forex trading hassle free. Relatively low entry barriers and huge profit potential is motivating student and professionals alike to participate in forex market. Forex trading or currency trading is based on fluctuating exchange rates of different currencies with respect to each other in forex market. If you are a student and planning to start on forex trading, you should get to know the advantages and disadvantages of forex trading first. Read on to learn about the pros and cons of online forex trading and things to do before you start your journey.
Advantages of Online Forex Trading
Learning and Earning at the same time - Students need pocket money and they earn it through some part-time job. Instead of some stupid low paying job you can opt for online forex trading as it provides the opportunity to learn and earn at the same time.
Effective Time Management – Sometimes the hectic study schedule makes it difficult to take up a part-time job. If you have access to a computer in your class, you can compensate for the part-time earning by doing forex trading.
Base building for long-term Career – If you are studying finance and planning for a long-term career in same field, you should definitely go for online forex trading. Career building in financial sector without forex knowledge sounds bizarre. You can start with paper trading first and gradually shift to real trading as you gain confidence. Forex trading skill set will definitely help you negotiate a better salary in your job interviews.
Disadvantages of Online Forex Trading
Deviation from Original Goal (Studies) – Making money in forex market is not as easy as it sounds. You need time for research and technical analysis, which will eat away your study time.
Risk and Uncertainty – There is risk of losing capital in no time, which makes forex trading a bad substitute for part-time jobs. As a student you start with limited capital in forex market, which will generate small profit, but with a lot of risk. You can earn same amount through part-time job without any risk.
Before you take the Plunge
Acquire knowledge and improve your time management skills – Forex trading is a good option, but first you need to learn trading basics to be successful. You should effectively manage the time of trading so that your studies do not get hampered. If you weave trading endeavours around your academic efforts, you could be a successful trader.
Do not be aggressive – Be a conservative trader. Your aim should be to earn pocket money and not funding your entire education cost. Tasting failure in forex trading at the very beginning will sow the seeds of fear in your mind. This fear will stop you from coming back to forex market in the future.
Eligibility Criteria – Different countries have different age criteria for participating in forex trading. As a student you can opt for online forex trading, but you need to full fill the eligibility criteria.