you're reading...

Career Advice

Foreign Exchange: Is it a Good Choice of Career?

If you are someone who enjoys statistics and is good with numbers, or just enjoys financial markets in general, a career in the forex market might be for you. There are a number of aspects of the forex market that attract many investors. For example, it is a 24/7 market that never stops. This is compared to the stock market, which opens and shuts each day. The Forex market is much more liquid and much more accessible.

This is in addition to all the usual bonuses of working for yourself. Those who work on the forex market full-time can choose their own hours; they will also have greater flexibility over the work that they do. And, of course, there is the opportunity to make some serious money if you make the right decisions.

But before you enter into the forex market, it is important that you understand as much as you can about it. You should make sure that you also appreciate the drawbacks, as well as the benefits, of working in the forex market.

The Benefits of Working in the Forex Market

There are some aspects of the forex market, which would be appealing to just about any of us. These are the best reasons to seriously think about a career in the forex market.

  • Low Cost: financially, forex trading has a very low barrier to entry. Most brokers make their money through the spread between the various currencies. This means that traders don’t have to worry about eliminating overheads or brokerage charges.
  • Caters to Those Who Vary their Trading Styles: Because the forex market is open all day, traders are free to choose when they work. This level of freedom is a big part of what attracts many people towards the forex market over the traditional stocks and shares market. This makes the forex market a particularly good place to work for those who prefer short trades. Short trading is trading where positions are changed over the course of hours rather than years. Short Traders will be buying and selling currencies having only held them for a short period of time. This allows them to see returns on their investment instantly, or at least on the same day.
  • Offers Very High Liquidity: The forex market is one of the most liquid markets out there, in part because it has a huge number of individual participants. This means that even exceptionally large orders can be filled when needed without there being any significant price deviations. This makes both price anomalies and price manipulation much rarer on the forex market than anywhere else. It also naturally encourages efficient pricing by allowing for narrower spreads.
  • No Central Exchange: There is no centralised exchange or regulatory body for the forex market. In the UK, forex brokers can choose to register with the financial conduct authority (FCA). Brokers who are certified by the FCA can be trusted by the consumer. So, the benefits of having regulatory oversight are still present in the forex market. That said, the forex market has more freedom than other markets. During extreme and unpredictable events, a nation’s Central Bank might try and intervene in the market in some way. However, generally, these interventions are foreseeable and are, therefore, factored into the prices of the market. Decentralisation and deregulation both help to avoid some of the usual market volatility.

Understanding the foreign exchange industry can be a key to succeeding in it as a career. Sites like InvestinGoal offer relevant news and advice with an extensive collection of detailed reviews, round-ups and guides that can help you make the right investment decisions.

The Drawbacks

Unfortunately, the forex market, like everything else, is imperfect. You should make sure that you are aware of the drawbacks of the forex market as well as its advantages before you commit to entering it as a career.

  • First and foremost, there are widespread worries about the lack of transparency in the forex market. Many nations have a regulatory body that forex brokers can voluntarily sign up to. For example, the FCA in the UK. However, the forex market is still ultimately an unregulated market. The burgeoning cryptocurrency market itself resembles an unregulated forex market. Traders are at the mercy of brokers. Even if a broker is certified, they could still, for example, process a trader’s order at a lower price than they should. The traders need to trust the brokers. This is what regulatory bodies such as the FCA aim to achieve.
  • The value of currencies is affected by a whole range of very complicated factors. Whereas in a stocks and shares market it is the fortunes of individual companies that dictate stock price, with the forex market, national currency prices are prone to influence from a number of different areas. For example, unexpected man-made and natural disasters can have short or long-term effects on the value of a nation’s currency. Political instability can also take hold of a nation within a very short amount of time, potentially completely upending the currency’s value.

The forex market is an excellent place to work if you know what you’re doing. If you don’t know much about the forex market but think that a career there might ultimately be for you, you should begin hunting down beginner’s guides and other useful resources online.



No comments yet.

Post a Comment


Get every new post on this blog delivered to your Inbox.

Join other followers: