Making Money using Forex Trading

There is no doubt that the overall popularity of forex trading is going up, and more people are looking at this as an option for investment. This is especially true when you compare forex trading growth to stock trading growth. There are several reasons for this including that it is fast as well as easy to understand. More people in the market are able to trade directly. If you are just starting out with this type of trading, one key concern you may have would be how do you make money? Start by understanding what forex trading is all about as follows.

Forex trading is all about changing one currency to another. The reason for this is to take advantage of a small change in the price. To make a profit, you need to have a currency which increases in value when you trade it with another one. This may take some time for you to figure out. Before you begin to make money, take some time to examine the different currencies to see how they move. This will also help you take into consideration the economic factors that may be causing shifts in the currency.

 

Practice

With knowledge to back you up, you can begin in forex trading. Before you put your actual currency at risk, you should practice using a demo account. This is the best way to develop your skill as you will lower your risk of loss considerably, so the fear of making a mistake will be somewhat eliminated. With real money, you tend to bank on your emotions, and your emotions may lead you astray. With a demo account, you will unearth techniques that help you enter the market.

 

Take it Seriously

Forex trading may not be your full-time job. It may be something that you do as a hobby with your disposable income. Even then, you need to take it seriously. In fact, think about it in the same way as you would a business that you own. With a business, you will have a plan and goals, and you will set aside time to meet tasks. Businesses make informed decisions and are always realistic about what they are able to achieve. Take your forex trading seriously as well.

 

Find a Professional

Missing a moment is not an option when you are forex trading. It may be challenging for you to identify all the possible opportunities that you can benefit from. Therefore, you should work with a forex trader or broker. These are people who have extensive knowledge of the forex market and how to profit from it. Furthermore, it is in their best interests for you to be successful as they normally get paid commissions when you have positive trades.

You may be concerned that finding a professional could lead to some loss especially from the costs of their services. Ideally, there is no fixed amount that a trader will charge so that you can create some sort of budget as there are variables that need to be considered. However, keep in mind that the trader can help you reach a profit of around 10% every month, much higher than the returns you can get from other investment channels. When the market is really excellent, you may even make a profit that is in excess of 25% on a monthly basis.

 

As a potential forex trader, you have every possibility of making money. Give yourself some time to get skills and gain momentum before you make this the channel of your income. You will get quick returns on forex trading.

How to Conduct a Personal Finance Review

Have you ever carried out a full review of your personal finances? It is likely that you have not. Most people only take the time to review their finances when things are not adding up, or when they are in a panic that things could be going wrong with their financial management. One must take their finances very seriously, and one of the ways to do those is to carry out a personal finance review at least once a year. By doing so, you will find that there are ways that you can easily identify where you can improve on your finances, especially when it comes to taking care of your health as well as elevating your overall productivity. With a review, you will look at two main things from the previous year, which are what worked, and what did not work.

 

Determining What Worked

Your actions are what determine the way that your finances are over the period of the year. So in the what worked section, you need to take some time to discover what your accomplishments have been for the year. These could include finishing paying off a student loan after years, or elevating your health and running a marathon. It could also be that you were able to supplement your income. By looking at this list, you will begin to see which months that you were able to accomplish something worthwhile, and where there is room for improvement. You may even be taken aback by the amount that you have managed to achieve within the year. Use your what went well list to plan for a better year to come.

 

Determining What Did Not Work

Here you need to look at some of the goals that you had set, and see whether you had managed to accomplish these goals or note. For those goals that you did not meet, you need to make an assessment of why you were unable to achieve them. By doing so, you may find that there are some circumstances that you need to overcome, or some area where you are falling short. Set a strike rate for your success against your goals so that you can improve on what did not work in the previous year. For example, your goals could be at 100%, though you will be satisfied if you meet them at 70%.

 

Planning for the Year Ahead

You need the historical information from your review to plan for the year ahead. When doing so, you should begin by creating categories for your financing (such as travel, business, health, saving etc.). Then ensure that within each category, you have something in place to measure the results that you achieve. For example, in the health category, you may want to lose 15 pounds by getting a monthly gym membership for six months. You may also choose to explore a vegan diet which will bring down your grocery bill. Every decision that you make will in some way impact your finances.

Therefore, in your personal finance review look at the income that you are likely to receive, and the avenues from which you will receive it. Set goals for each avenue, such as working towards a promotion or building your personal business. You also need to have some money aside for your savings, and you can save for something like retirement that is long term, or something shorter term like purchasing a new appliance. These should form part of your review. Finally, decide how much you want to give away in gifts for the period of the year. Having this well outlined will prevent you from overspending.

How much do you need for retirement?

It is essential that you plan for your retirement, starting from the first job that you ever have. If you have already passed that milestone, do not worry, there is still time for you to get started. In fact, it is never too late to start. However, one may wonder why there is actually any need to save for retirement, especially when you are in your early twenties or thirties?

Well, think of it this way. When you retire, you will have no source of income. In the event that you have been employed your whole life, you will no longer receive a salary. If you run a business, you may need to hand the reigns over to someone else as you may not have the strength to keep it going. Better health care means longer life, so there is every possibility that you will live for up to thirty more years after you have retired. In those thirty years, you need housing, to pay bills, food, entertainment as well as disposable income for other needs.

It is estimated that in your retirement, at the very least you should have access to 70% of your annual income each year. That means if you earn $100,000 a year, you should be able to access $70,000 a year. Furthermore, it is recommended that on an annual basis, 10% at the lowest of your income needs to be set aside for this purpose.

So how do you determine how much you need for retirement? Here are some ideas to help you figure this out.

 

Savings and Investment

When you think of saving 10% of your income each year, how you will have enough to make it through retirement may seem challenging. What you should do is look at your retirement fund from two angles, and that is savings as well investments. You need to ensure the money that you are saving is able to grow for you. A good estimate of savings and investment is to have 20% of your retirement fund in a fixed deposit account, and the rest in investments that you can liquidate when required.

 

Give Yourself Benchmarks

Saving for retirement requires a plan, and for the plan to be successful you need to have benchmarks. These benchmarks should every five years. For example, when you have reached the age of 35, you should have been able to save up one full year of your income for retirement. By the age of 45, this should have gone up to at least four years’ worth of your income. With benchmarks like these, you can tell when you are off course, and how you much more money you should put aside by cutting down your expenses.

 

Build Up Your Assets

Work towards building up a good base of assets. The main asset that will eat into your funds is housing, so aim to be a homeowner by the time you have reached retirement. This means that your mortgage should be fully paid for by then. In addition, you should have a car, and a good car, that you can move around in to cut down on your need to purchase one in your retirement. Ensure that you have no outstanding debt, especially credit card debt by then.

 

The amount that you need for retirement depends on your own expected level of comfort, and the lifestyle that you want to live. Work towards ensuring that you can enjoy these years, rather than suffer through them. The most important thing to do is to get started, and with a plan you will put away just what you need.