One of the most exciting appeals of Forex is the possibility of breaking free of your 9-5 job, or at least supplementing your income with regular trading revenue.
In fact, if you are new to trading, big dreams are probably fuelling your ambitions. Nevertheless, chances are good that you have already encountered traders who have tried to earn a part- or full-time living this way who have failed.
This may worth to wonder whether it is realistic to make at least a small side income from trading Forex.
To answer that question, we will go over some of the obstacles which can make it a challenge to succeed with this endeavour. We will then offer some recommendations to increase your chances of success.
Is it possible? Yes!
First of all, the short answer to the question, “Is it realistic to earn a small side income from Forex?” is “yes.”
But that “yes” comes with a lot of caveats. It is not realistic to go into the proposition assuming that it is going to be easy, or that you will succeed with it rapidly.
It can take months or years to build a regular, reliable income from FX trading. Along the way, you may face many challenges.
If you are unprepared to meet those challenges, or if you attempt to rush forward and take huge risks, you will blow your account.
Obstacles you may need to overcome to turn Forex into a reliable income source
Let’s go over some of the challenges which may confront you so that you can make plans to tackle them.
One of the most common challenges which a lot of retail traders will face is a lack of funding.
It is true that you can open a trading account with a relatively low deposit. It is also true that on some platforms, you can make extremely small trades.
That means that even with just a few hundred dollars, you can get started trading Forex.
But what you might not realize is that if you are making appropriately sized trades (i.e., risking no more than 2% of your account balance), it is likely you will be earning modest profits starting out.
You do have the potential to grow your account exponentially over time, but it's going to be slow-going starting out.
Another barrier toward becoming a successful currency trader when you already have another profession is a lack of time.
Even trying to earn a small side income with FX is essentially a job. You will have to pour in the same amount of time, energy, and hard work as a full-time trader when it comes to learning to trade, following the markets, and creating and testing a profitable method.
Dedicating the time you need isn’t impossible, but it will require some creativity.
On a related note, scheduling can also pose some difficulties when you need to trade around a day job.
This is not an impossible hurdle to overcome, but it may require you to find a way to trade during work hours or overnight.
You need to be able to focus when planning and executing trades, but that can sometimes be hard to do when you are planning for a work meeting or worrying about a recent evaluation at your day job.
5. Energy and willpower
Your day job doesn’t just demand time — it also eats up energy and willpower. That can leave you struggling to find the dedication to commit to Forex.
Tips for succeeding at making a small side income with Forex
Now that you know some of the potential barriers which can stand in your way, how can you overcome them?
These recommendations should help.
1. Don’t quit your day job.
You may feel a temptation to throw in the towel with your day job altogether and commit to becoming a full-time foreign exchange trader.
Whatever you do, don't do this. Having a day job is advantageous starting out, usually essential.
Your day job gives you financial stability, and thus also some emotional stability. Additionally, it provides you with funds you can add to your trading account.
If you are constantly pulling funds from your account to pay your rent, you will never grow your account.
2. Choose a strategy and a timeframe which are suitable for your scheduling requirements.
Keep your current scheduling needs firmly in mind when you are investigating trading systems.
You should be able to find a system that allows you to trade around your day job.
During the demo testing phase, you can test drive this idea and make sure you have picked a viable strategy.
3. Be patient and consistent.
The single most important thing you can do to help yourself succeed at earning a side income from Forex is simply to get ready for the long haul.
You will not become a profitable trader overnight. That can be hard to accept, but the sooner you do, the better shape you will be in.
It takes time to earn consistent profits, but it does not take time to trade in a consistent manner. You can resolve to do that right now.
So, choose a conservative money management plan, keep trade sizes consistent, follow your method, and do not try to rush ahead by staking larger and larger sums of money.
Slow, steady growth is the path to success.
Conclusion: Building a side income with FX is realistic, but it isn’t easy
Now you know some of the hurdles you will face when it comes to making a side income with Forex. You will need to find a way to handle time and scheduling constraints, maintain your dedication, and cope with the slow start of a small bankroll.
But with patience, consistency, creativity and commitment, you can overcome these obstacles. Eventually, you can earn a small side income with currency trading. And from that foundation, you can grow your account. Maybe one day you will be earning enough that you can quit your day job after all.
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