Starting a business is, and always has been a tough task to accomplish. That has never been more true than today – with the COVID-19 pandemic in full swing, lockdowns, and economic uncertainty, chances are that even if you’ve already gotten your foot in the door, times are tough.
And running a business goes beyond just a job. More often than not, it is the culmination of passion, hard work, sacrifices, and a large amount of risk. Starting a business and then having it fail is so much worse than losing a job – especially if you employ others.
In these troublesome times, Forex trading can be an additional lifeline – one that you might not have considered before. Odds are that you’re aware of the foreign exchange market – but most people don’t think to incorporate it into their business.
We’re going to go through the most important reasons why this method of investing might be just what you need to bolster your business – and why treating forex trading as an integral part of your business is the correct course of action.
Reason #1: Low Barriers to Entry
One of the primary benefits of forex trading is that it doesn’t require a large amount of capital to start off with. And starting small might be the smart play here – at least until you’ve gotten some notches under your belt.
Other methods of investing usually require you to fork out a larger sum upfront. With forex trading, you can slowly expand your portfolio – meaning that your cash flow doesn’t have to be burdened all at once.
The biggest barrier to forex trading is knowledge. Thankfully, a vast majority of brokers offer paper trading accounts that allow you to practice with virtual money before taking the plunge into the world of real currency exchange.
What all of this adds up to is this – you need to learn the basics of forex trading before diving in. Once forex trading becomes accessible, you can take things at a pace that you’re comfortable with.
Reason #2: Flexibility
The forex market offers unrivaled flexibility, allowing you to adapt your approach to the specific needs that you and your business have. The market is open 24 hours a day for five days of the week, and access requires nothing more than a broker and a laptop.
In practice, this means that you won’t have to sacrifice anything relating to your business to take a crack at forex. No particular need to schedule anything, no need to switch up your hours – you trade when you can, where you can, and the market is always there.
Reason #3: Diversification
As any business owner worth their salt knows, keeping all of your eggs in one basket is a great way to have all of them break at once. Diversification is key – and it always will be. Mitigating risks is always a good idea – and it applies just as well to any sort of business.
Diversifying your investments allows you to more easily weather market fluctuations. And you should treat forex trading as an investment – an investment that your business is making.
This accomplishes multiple things – it forces you to seriously commit to educating yourself and helps protect you from the number one all-time mistake of forex traders – overconfidence.
If you treat forex trading as an integral part of your business, two things will happen: not only will you diversify your investments, but you’ll also end up a better trader along the way.
Reason #4: No Overhead Expenses and Potential Tax Benefits
Expanding a business in any way usually comes with a host of overhead expenses, complications, paperwork, invoicing, outsourcing, red tape – the works. But incorporating forex trading into your business is simple, easy to set up, and won’t cost you a lot of money.
When compared to other methods of expanding your business or diversifying, incorporating forex trading is a walk in the park. In much the same way as small business accounting software makes it easy to track expenses and transactions, forex brokers automatically keep a record of your trades – making it easy to get an overview of your performance and the state of your account.
This, in turn, also makes it easy to potentially deduct losses from capital gains taxes – a win-win situation.
Reason #5: Wide Variety of Available Platforms
It comes as no surprise that a market as large and dynamic as forex has a lot of brokerages. You have a lot of choices here – and you’re bound to find a platform that suits your needs perfectly.
Most brokers also have transparent pricing schemes – allowing you to avoid any of the unforeseen costs of running a business that are all too common.
Keep in mind that the forex industry does carry risks – so always be sure to check whether or not a brokerage is safe, secure, and regulated by the appropriate bodies.
Reason #6: Access to Leverage and Potential for Large Profits
Foreign exchange trading is one of the rare parts of the market where retail investors can access leverage – significant leverage, in fact, and rather easily.
Now, let’s just pump the brakes here for a second – this is a double-edged sword. It carries risk, yes, but it can also bring tremendous benefits to your business – provided you properly manage leverage.
If you can manage the risks and avoid developing bad trading habits, leverage allows the profit potential of forex trading to skyrocket – and you don’t have to invest more money. In the current business climate, the ability to scale in such a way without investing a large sum is invaluable – and as a business owner, you won’t find it anywhere else.
Reason #7: Reliable, Active Market
The forex market is incredibly large and dynamic – in 2019, forex trading volumes reached an unbelievable $6.6 trillion per day. The annual turnover of the forex market is almost 17 times as large as the global economy.
The fact of the matter is that forex trading is here to stay. It isn’t affected by the stock market in the way that most other investments are, doesn’t experience the price fluctuations of cryptocurrency, and the exchange of currency is absolutely vital for trade and the global economy. In its own way, although risky and volatile, the forex market as a whole is reliable.