Travelling the world, making lots of money and treating every beach as your office. It’s the dream of every digital nomad, and it sounds simple if you say it quickly enough. The trouble is, whether you are looking to finance your existence through blogging, web design, writing or acting as a remote PA to a city drone, the biggest barrier you will hit upon is that the virtual marketplace is as crowded as it is vast.
The idea of dabbling in Forex to either supplement your income or, if you are really good at it, as your main activity is a compelling one. After all, the currency markets are always open, trillions of dollars are traded every day, and there is always room for one more. But can you really make money on the currency markets? Intuitively, we know the answer is yes – success stories abound. But then again, there are as many, if not more, tales of amateur traders who have jumped into the markets with a $25,000 trading account and emerged with a bloodied nose and only the shirt on their back.
Let’s take a first principles look at how you can take on the markets and at the very least hold your own.
Learn the basics
Make no mistake, Forex trading is complicated. There are hundreds of currency pairs, all affected by hundreds of external influences, and then dozens of different tools and indicators with which to assess them. The good news is that this is the information age. There’s no shortage of resources and tutorials to coach you through the basics of how to start Forex trading at home – and if in your case, “home” means a beach on Bali, all the better.
But while it is one thing to have the information there at your disposal, only you can transfer it from your screen into your brain and start making it work for you. It needs time, concentration and dedication. And if you are currently engaged in other remote working activities to make ends meet, that’s something that is not always easy to find.
Practice makes perfect
Once you’ve got to grips with the essentials of the money markets, you will probably close your eyes and night and find yourself dreaming about pips and Bollinger bands. Unfortunately, that’s only the beginning. Running through the tutorials and learning how the different indicators work is a little like taking your driving theory test. It’s all good information, but it doesn’t prepare you for getting out on the road.
Once you feel you’re ready to put your new knowledge to use, you’ll need to install a trading app on your laptop, smartphone or ideally, both. There are plenty of useful apps to choose from out there, and many are free to download. It’s really a case of feeling out the different options to see which ones you like best, but whatever you do, choose one that allows you to open up a demo account first.
This is where the real learning begins, and while you might be tempted to put some money on your account and start making your millions, just remember that this is the point at which those who are going to lose their shirts usually do so. Remember the parallel with the driving lessons, and avoid being flattened by any metaphorical trucks by limiting your initial trading to a demo account.
This uses current, real-time data and lets you try out all the strategies you have learned in a real-world environment. The only thing is, you won’t be trading with real money. In the event that your first trade goes spectacularly well, you might feel irritated, but for most, the early trades are fraught with mistakes. They will make you a better trader in the long run, and if you can make them without doing any damage to your bank balance, that has to be a good thing.
Slow but sure progress
There are some gloomy souls out there who suggest there could be a 10 year learning curve that you have to go through to make any money out of trading. That is clearly an exaggeration, but at the same time, you need to be prepared for the fact that you are not going to be raking in thousands of dollars in the first month, or even year.
The point is to start slow and simple, and to keep your trading activity in step with your personal development as a trader. Albert Einstein famously said that if you can’t explain something so that a six year old will understand it, that means you don’t understand it yourself. It’s a handy rule to keep in mind, and if you find your trading strategy starts failing the six year old test, you know it is time to take a step back and rein in your activities.