The largest liquid market in the world, foreign exchange trading, commonly known as forex trading, is a very attractive business because of the high returns in a short period of time. Forex trading is the most active market in the world as well, with a global annual turnover of 5 trillion on average per day. The ease of access, 24 hour availability and extremely high liquidity make it an attractive candidate to make money. So it is not entirely surprising that people want to use it to make a quick buck. But a lot of people are reluctant to start trading in forex because of the high losses that come with it.
The main thing that needs to be understood about forex is that it is almost impossible to make a profit from forex trading without a deep in-depth understanding of the market. The market, mentioned just before, does not constrain itself to the forex market. This leads to another point of the forex market: volatility. The volatility of the forex market is so high because of the fact that it is a global market, and anything significant such as an election in a major country, a terrorist attack, natural catastrophe or even the announcement of a billionaire regarding the sale of their shares can affect the forex market. This makes it all the more important to have a good understanding of the subject.
An advantage of the forex market is that the capital you put into the trade depends completely on the amount you are willing to lose. There are several different types of forex trading accounts, one of them being micro accounts. You can invest as low as 1 USD and still be able to trade. Of course there isn’t going to be much of a turnover with such a low amount, but as you get better at it you can invest more and more, and with experience you will be able to make a large amount from just forex trading.
One of the best ways to start out with forex trading is by day trading part time. The advantage of this method is that the investment is fairly low and you can use this as a supplementary income. This is also one of the best ways to learn your way around the forex market and get a clear picture about what goes on in the trade.
Deciding how much money to invest in forex depends on the risk you are willing to take. The difference between using spare capital to give it a shot at the big leagues and pitching life savings into it must be clearly understood and an appropriate course of action must be deduced.
So to conclude, yes, it is possible to make a living off forex trading but only if you do enough research and have a definitive understanding of how the forex market works: at least in theory.