How great would your life be if you’d learned how to make money work for you instead of vice versa? You would have time to enjoy the little pleasures in life, travel, discover new and interesting hobbies, and much more.
For many traders, this is just another day in the world’s largest financial market. Forex trading, short for foreign exchange trading, involves buying and selling currencies from around the globe.
While it’s not something anyone can do, Millennials may be the best positioned to try it because it doesn’t require a big upfront capital or insider knowledge. You don’t even need a finance degree to start; all you need is capacity for research, time, and internet access.
For a generation drawn toward side hustles and tech-savvy ways of earning extra income, this type of trading might just be the modern answer they’ve been searching for.
Forex trading is the act of buying one currency while simultaneously selling another. It’s like when you travel abroad and exchange your dollars for yen or euros. But instead of going on vacation, your aim is to profit from the rise and fall of currencies’ values.
With an average daily turnover exceeding $7 trillion (according to BIS data), it’s by far the largest financial market in the world. To put that into perspective, it's more than 25 times larger than stock markets combined!
As digital payment systems grow globally and economies remain interconnected, forecasts suggest this colossal market will only expand further. Plus, unlike stock exchanges where you have specific trading hours, the Forex market operates 24 hours a day, five days a week.
Believe it or not, Forex is easier than trading stocks. All you have to do is “bet” on a currency.
Its core revolves around currency pairs, like EUR/USD (euros versus U.S. dollars). You, as a trader, speculate on whether one currency will strengthen against another within these pairs.
For example, if you believe the euro will increase in value compared to the U.S. dollar, the best bet is to buy euros and sell dollars at a set exchange rate. If your prediction pans out and the euro strengthens, you make a profit based on that price difference.
Another very popular currency pair nowadays is XAU/USD (gold vs. U.S. dollars). This pair works similarly to other currency pairs: You can buy or sell gold based on your expectations of its price movements.
The best part is that you can speculate on the price of gold without physically owning the metal! If you want to go more in-depth about how this system works, a broker like AxiCorp can help you understand how gold trading strategies work.
Millennials, especially younger ones, are more open to the gig economy and are more likely to have a side job. They are also more tech-savvy than older generations and can pick up on technical terms a lot faster.
Sadly, millennials are also less likely to be able to afford a big upfront investment, like it’s needed with real estate or stocks. Since you can start Forex trading with as little as $50, it’s easy to see why more people are willing to try it.
For a generation glued to smartphones and used to digital tools, it’s extremely convenient. You can use your phone to monitor markets, place trades, and receive updates in real time.
Overall, currency trading is accessible, has a low entry threshold, and can be controlled using a smartphone. What more could a millennial want?
It’s important to understand that this is not a no-risk investment. To become a successful Forex trader, you have to learn how to spot a scam from a mile away and stay up to date with the factors that may influence your currencies.
With Forex, you can lose more than your initial investment due to leverage, market volatility leading to sudden losses, and emotional decision-making that leads to impulsive trades.
It’s crucial to do your research and practice strong risk management before diving in!
Forex trading offers Millennials a chance to achieve financial independence through strategic thinking and continuous learning. With patience, practice, and smart risk management, this market can become a pathway to long-term wealth and flexibility.
