Top 10 Best Forex Trading Books For Beginners
How To Trade Forex With $100 And Make A Passive Income
A question that everyone asks themselves sooner or later is when they will be set for life. The thought of working a 9 to 5 job for the rest of your adult days is not something anyone looks forward to.
Many will agree that a simple day job pays your rent and puts food on the table but you may end up living a very restricted lifestyle due to it. You may have to sacrifice sleep, family time, hobbies, and sometimes even vacations to continue doing your day job.
Everyone dreams of retiring to the location of their dreams one day but the sad reality often is that they can barely support their current lifestyles if they abruptly gave up on their day jobs.
In earlier days, people would consider themselves set for life if they managed to accumulate a million dollars for their retirement funds. These days, the number has jumped to $5 million instead of the 1.
Having a side income or a passive income not only helps improve your lifestyle but it also opens up the doors and gives you opportunities that can help you shape a better future for yourself and be set for life.
Many people gravitate towards forex for this simple reason, because with forex trading, one has the opportunity to turn the $100 that they have in their pockets into a good source of passive income.
But what does passive income mean?
One can define passive income as the type of money that is generated regularly. Passive income also requires very little effort which essentially means that the recipient doesn’t have to jump through too many hoops to gain it.
Perfect examples of passive incomes are the returns you get from the various investments you make or simply your trading efforts. Other forms of passive incomes can be inheritances, capital gains, etc.
Having a source of income that falls into this category automatically enhances your quality of living and makes it possible for you to enjoy your life and save an ample amount of money for your future.
You can also save a good portion of this earning and use it for your retirement fund, buy the dream car that you always wanted and much more!
Forex Trading Can Be A Great Source Of Passive Income
Forex traders make use of the incredibly liquid foreign exchange market where the conversion of currency into another takes place allowing fx traders to earn a handsome amount of money.
Forex trading is an essential part of our daily lives as anyone who has travelled abroad has made a forex transaction at least once and it takes place for a variety of other reasons such as tourism etc but the majority of forex trades are done to earn a profit.
As we said before, forex trading can be a great source of passive income for you if you take it seriously in its initial stages and do thorough research on the subject.
Starting Your Journey As A Forex Trader
The foreign exchange market or the fx market as some people call it for short is an international decentralized market that gives anyone from any part of the world the opportunity to trade currency pairs and earn money in the process.
The foreign exchange market is open 24 hours a day. 5 days a week. and only closes on public holidays. Since it has no central location, the fx market is monitored by several government bodies and organisations all over the world.
Some of those organisations are:
And many more.
These supervisory bodies are in place to ensure that forex trading takes place as ethically as it can in a fair environment. Certain standards are set by these organisations that have to be followed if you want to be able to trade currencies legally in your region.
To become a forex trader, all you have to do is register with a legitimate broker that has all the necessary permissions to act like one in your region and is trustworthy with a great track record.
Picking the right broker can be a daunting task for beginners as they might feel overwhelmed trying to choose the right online broker as there is a handful of them out there claiming to be the best.
However, beginners and newcomers to the trading world don’t have to worry as long as they have Olymp Trade as their broker due to the fact that it is one of the oldest and the most trustworthy online brokers available on the market.
Olymp Trade is easily the best broker available for beginners as it has a variety of assets and a wide array of markets such as commodities, cryptocurrencies, and most importantly the foreign exchange market among others.
How To Start Forex Trading
Once you have decided on a broker after thoroughly going through their reviews and the features that they provide, you need to register for an account with them. This is an easy process and it only requires you to enter your email id and set a strong password.
Once you're inside your trading account, you can add in further details such as payment details, and verify your account to unlock all its features.
Olymp Trade also offers its users the facility of a demo account that has been designed to let new users experience all the aspects of online trading.
The Olymp Trade demo account comes loaded with $10,000 credits that can be used to simulate online trading conditions. You can use this play money to simulate currency trading scenarios and learn how the entire platform works.
The Olymp Trade demo account is an invaluable tool for beginners that are looking to start trading but don’t know have the necessary skills or the experience to start investing large sums of money.
Planning Out Your Strategy Before Starting Your Journey
The forex market is an incredibly powerful market that can turn the mere $100 you have in your pockets into an unstoppable source of passive income that will last you a lifetime! However, having a strategy and carefully planning out every step of your journey is crucial.
Fortunately for us, we live in an era where technology has advanced so much that it can help us analyze situations and make decisions based on logic and reasoning which is a very important trait if you want to be a successful forex trader and generate a good income from it.
Those looking to generate a passive income from trading will have to depend on techniques and strategies that are best suited for passive traders rather than mimicking what the big shot traders do in real life.
Active Traders VS Passive Forex Traders
Active traders take forex trading very seriously and try to put in more hours into their craft. These are the type of traders that put in more time and investment into their trades.
Active traders are constantly keeping themselves up to date with the latest stock market and global news to come up with better trading decisions.
On the other hand, traders who treat the fx market as a side-business or a hobby fall into the category of passive traders.
The ones who are looking to make a passive income from forex trading are generally passive traders as they are not committed to trading full-time and have a day job or a business to tend to.
Tools Passive Traders Use
Passive traders utilize a variety of tools to make their lives easier. It should be noted that finding the strategy that suits you and setting it up will take you a bit of time at first.
Some of these useful tools are:
Automation Systems: Passive traders don’t have a lot of time on their hands to tend to each and everything that pertains to their trading platform. This is where automation plays a big role.
These automation tools allow you to trade in several markets simultaneously provided that they have been programmed with the necessary data to make those decisions.
If you have any doubts on automation systems then you may be surprised to know that around 75% of all the trades that take place in New York stocks exchange, as well as the NASDAQ, utilize automation systems on a daily basis.
Algorithms: These are the logic-based code that guides your automation systems. People with ample technical knowledge can even write their algorithms to suit their needs. Sophisticated algorithms can easily enter and exit positions on their own once deployed.
Software: After finding the right software, you can program it to create a checklist that will automatically take care of the times to enter or exit positions, determine position size using calculator tools, set up a trading time-frame, and much more.
Once you have set up your automation system and tested it under different conditions until you are satisfied that it is completely fail-proof, you can sit back and let and observe as your passive income starts building up.
You will have to routinely check and update your system to make sure no technical glitches or wrong parameters are present in the system. Taking the help of a programmer is recommended to set up a fail-safe system if you lack the necessary skills to build one yourself.
Copy Trading: An Alternative
If setting up and programming each decision logic into your automated system is too bothersome for you then you can try the Copy Trading method.
In copy trading, all you have to do is analyze the strategies of successful and well-known traders who share their strategies and decision making reasoning with the general public.
After you are satisfied with the strategies of the trader you have selected, you can simply have a program copy the trader’s buying and selling decisions and link that to your capital.
You will have to pay a small percentage to the website as well as the trader for their services as well.
As ingenious as is sounds, copy trading has its arrays of risks that you need to be aware of. The forex currencies can be very volatile owing to various conditions.
There’s always a chance that you may end up losing all of your capital if the trader that you are mimicking makes the wrong choices.
On the other hand, choosing the right trader can also be a herculean task for a beginner as there are thousands of traders on the market who are looking to sell their services. Finding the right one can take you a significant amount of time.
Furthermore, copy trading is said to be a good tool for beginners who are looking to learn trading but don’t have anyone to mentor them.
Copying a big trader’s market decisions can help them grasp the basics of forex trading and come up with their strategies in no time.
At the end of the day, everyone likes the idea of having a source of passive income to live a better life and upgrade their lifestyle.
As we all know, in this day and age, saving money is simply not enough to live a comfortable life in your retirement unless you plan on retiring to a remote place and lead a self-sufficient lifestyle.
With forex trading and a little bit of preparation, you can easily turn your $100 into a long term investment that will take care of you in the long run. We have discussed various trading strategies one of which is to choose the right online broker such as Olymp Trade.
After choosing your trader, we talked about various other trading strategies such as mimicking a bigger trader or set up an automated system that will take care of your trading decisions while you work on your day job.
Those who develop a knack for forex trading can also choose to transition from passive trading to active trading and make forex trading their main source of income as this can also be a lucrative career if you are successful enough in it.