If you’ve ever travelled outside of the country, you’ll know that exchange rates can vary considerably to another. There are numerous factors for this too, with economic and geopolitical triggers capable of ruining your holiday and reducing the value of your businesses cash holdings.
If you’re a forex trader, however, you’ll also know that fluctuating currency values offer a unique opportunity to generate significant profits that are based on margin. These profits can be achieved with a relatively low capital investment, creating the type of business model that should appeal to most entrepreneurs.
But how exactly should you go about launching a successful forex business? Here are some things to keep in mind:
What is Forex Trading and is it Right for you?
If you set up a forex trading business, you’ll be required to invest in currency independently and on behalf of private clients.
As currencies are classed as a derivative asset class, you’ll be able to speculate on the performance of specific pairings, whether you choose to back the USD/GBP or hedge against the GBP/Eur.
This market sees in excess of $5.3 trillion traded every single day, whilst the proliferation of online trading platforms has made it easier than ever for forex businesses to engage with the market, minimise risk and execute a high volume of orders simultaneously.
This is also a market with no downtime, as the forex market is open 24-hours and for six days a week.
As a result, entrepreneurs can structure and scale their business model to optimise their level of market exposure, by trading across all three sessions and profiting from both major and minor currency pairs.
With these points in mind, this type of business is ideal for entrepreneurs with a significant appetite for risk, as well as those with a strong and robust work-ethic. It’s also ideal for those with a strategic and deterministic mind, whilst a willingness to learn and constantly innovate also stands forex traders in good stead.
How to Launch your Forex Startup
Before you even contemplate launching a forex startup, your first step should be to learn the market in comprehensive detail.
There’s a wealth of learning resources available to aspiring traders in 2019, from video tutorials to physical seminars and webinars. By combining these different learning channels, you can access a more in-depth education that really sharpens your skills and helps you to hone a deterministic mindset.
Even though you don’t require a large amount of capital to start currency trading, it’s still important to organise your financial resources and provide some form of fiscal contingency.
For example, if you can open a forex account for as little as £10, we’d recommend launching with a reserve of at least £1,000 to cover initial losses.
At this stage, you’ll need to partner with a reliable and certified forex broker that can connect you to the market and an entire suite of technical analytical tools.
Brokers such as ATFX offer a relevant case in point, as they also offer you access to a host of additional markets that can help you to diversify your portfolio over time.
At the same time, this type of platform also offers you access to a demo account, which enables you to test and hone your trading strategy in a simulated but real-time marketplace. This provides a risk-free and practical learning experience, and one that make the difference between successful and failed forex ventures.
Samantha Acuna is a writer based in San Francisco, CA. Her work has been featured in The Huffington Post, Entrepreneur.com, and Yahoo Small Business.