Choosing a career in financial services provides plenty of opportunities. From the back office of a local bank branch to the floors of stock exchanges, there are few industries that have so many varied roles as finance. Over one million people in the UK alone work in finance, with millions more the world over.
To work in finance, it is essential to know about all the trends and terminology. There are a lot of different areas of finance to familiarise yourself with too, one being the foreign exchange (forex) markets. Like many other ways of trading the markets, it can be done at any time of the day, anywhere.
Having forex as a hobby or as an entry point into the world of finance can prepare you for a finance job, but how? By giving you a handle on how markets work, the value of global currencies and how major news stories and announcements can help to shape the markets.
The value of money
Knowing how much individual currencies are worth is a key component of forex trading. Measuring the Euro against other global currencies such as the Dollar, Pound and Yen will at least give you a rough idea of how to convert currencies when estimating profits and revenue.
Getting into forex trading involves knowing about how values can change in an instant. Whether it’s because of good news such as economic growth forecasts or due to political instability, any big events could trigger major peaks and troughs that make the difference between profit and loss.
When trading, you need to know about what stories are likely to impact on currencies’ values. A firm eye on financial news websites and a trading platform with access to major financial events e.g. quarterly forecasts are needed. For each forex trade, you must know when to pull out of a trade when you are satisfied with any profits made or want to limit losses.
In the financial sector, good judgement is required for every role. This certainly applies to forex, as you need to make an informed decision before each trade. Research on two halves of a currency pair and scouring of historical data should precede a trade. This can take a few minutes at least, but it can make all the difference.
Once each trade is open, your judgement should be used for deciding when to end a trade. Maximising profits and minimising losses are both important. To make sure you don’t lose too much money, keep an eye on how your trade(s) are going. If it is going against how you predicted on half of the currency pair would perform, pull out quickly.
For your first trade, start off with a small deposit. If you don’t want to lose too much, it pays to start off from a low base. A relatively risk-free trade will help you to learn from any mistakes made as you become more confident.
Trading forex will equip you with plenty of skills and knowledge that can be applied to many areas of the financial industry. Using those skills will give you a head start over other jobseekers and, if you trade sensibly, some extra income.