Can You Make Money With Forex Trading? Understanding the Rewards, Risks, and Realities

I don’t usually talk about high-risk investments on this blog but I think it’s important to explore all avenues in the world of making money online and to be well-prepared when the time comes. Inside today’s topic – can you make money with forex trading – we shall explore the rewards, the risks, and the realities of this rather captivating market. So, let’s dive right in.

Forex Trading 101

If you’ve traveled overseas and spent on foreign currencies, you’ve done a forex transaction before. And that’s what the process is all about, exchanging one currency for another in the hope to make a profit from the price difference.   

The Foreign Exchange market, also called FOREX or FX, is a globally renowned market for currency trade. It has a daily transaction volume of more than $5 trillion, making it the biggest and most exciting financial market in the world compared to stocks and commodities trading. 

Forex’s popularity attracts foreign-exchange traders of all levels, from beginners to the experienced and there are the four key players you need to know; 

• Central banks
• Foreign exchange banks
• Brokers 
• Clients (this is the pool you’ll likely join as a trader) 

The Advantage of Trading 

• The forex market is open 24 hours a day, 5 days a week (from Friday evening to Sunday evening). That means you can trade all day long and still get some rest over the weekend. 
• You can create a free demo account with the brokers to ‘test the water’ and learn the day-to-day trading scenarios while polishing your knowledge about the terminology and movements of the market. When you are ready to trade with real money, you can start with a minimum deposit of $100 to $200.  

• There are plenty of resources for leverage, also known as funds that can be loaned to amplify profit returns. This volume can carry a high margin, some up to 50 times more than the amount of capital you put toward a trade.   
• Due to the fast-moving and deep liquidity nature of the market, profit can be made quickly compared to other trading markets. 
• Unlike other trading markets that are influenced by private information, the currency market is more transparent and thus, less subjective to any form of manipulation. 
• Forex is well integrated with automated trading systems. Where such technology is available to the users, one can instruct the platform to trade on specific price movements or market conditions without having to keep an eye on the latest changes all the time. 

The Disadvantage of Trading 

• Forex is a highly volatile market and changes according to socioeconomics situations across regions. This unpredictable nature can put your investment at risks and that’s why you are always advised not to trade more than what you can afford to lose. Such warnings are clearly printed in many financial services sites, as can be seen with this one; 

• The lack of central regulations means that the market is easily subjected to insecurities like shady brokerage companies or investment fraud schemes. That’s why it is common to see many Forex scams online and new ones popping up all the time. 
• The art of currency exchange can be foreign to many beginners and it can take a few months just to understand the theory alone and a few more years to fully master the trade. That’s why it’s recommended to use a demo account first while learning the skills. 

5 Ways to Make Money With Forex

Thanks to the rapid use of the internet, there are actually a few ways to monetize from currency exchange. Let’s start with the one that we are most familiar with first. 

1 – Day Trading

Forex trades 24 hours a day and can only be done through a broker. A legit broker should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). There are always free trials available to test different trading platforms and once you’ve decided, you will open an account with one of these companies and an account number will be sent to your email after verification. 

Each company has its minimum deposit so find out what that is before transferring any funds into your account. Inside the trading platform, you will also get access to real-time charts, live price feeds, technical analysis tools, regional news as well as support to help you speculate each trading activity. 

The amount of money you make is very much dependant on your capital investment. It’s always recommended to start with minimal risk first such as 1% or less. That means you don’t want to lose any more than $10 on a single trade in which you invested $1000. Of course, if you put in more money and willing to take higher risks, the earning potential would be a lot more. 

2 – Forex Affiliate Programs

Affiliate marketing is a business model that lets you earn from online sales referrals. In the Forex niche, we are mostly talking about brokerage services and trading platforms. These merchants provide you with affiliate links in the form of text or images to be used on articles, blogs or videos. 

While there are no hard and fast rules about who can join as an affiliate, it makes sense to say that active traders and individuals with a keen interest in financial investment are most suited for these programs. 

That’s because when you speak and write from a user experience point of view, it is much more convincing to advocate about a particular product to an online audience. While Forex trading is the core skill here, affiliate marketing will also equip you with other internet marketing knowledge such as SEO, keyword research and social media. 

When combining the two together, it elevates your authority in the niche, gets more traffic to your site or YouTube channel and improves the click-through rate of your affiliate links. Sounds like a lot to master, right? 

Well, it is but when done right, an affiliate site can generate a stream of passive income which is the total opposite from the unpredictable nature of trading forex. With so many people looking to enter the Forex market, you are putting yourself in one of the best positions by joining the following affiliate programs; 

1. Admiral Markets – earn up to $600 per referred client
2. Just Forex – earn up to 65% per trade 
3. Libertex Affiliates – earn up to 60% of the broker’s gross revenue
4. Octa FX – earn up to $12 per lot
5. XM – earn up to $25 per lot 
6. VantageFX – earn up to $800 CPA 

3 – Become a Broker 

A broker is someone who provides traders with access to the Forex trading platforms and they make money mainly through charging commissions per trade or earning from money loaned to clients in the form of leverage. 

The straightforward method is to join a brokerage firm and that usually requires you to have a degree qualification in business and economics and also experiences in selling financial products. 

Alternatively, you can set up your own brokerage by registering for a company and hiring a team of qualified individuals. You also need to purchase a trading software that can cost anywhere between $1000 to $100,000. 

It’s a lucrative career to consider because, with skills and experience, you can choose to work from home while operating your business worldwide. 

4 – Become a Forex Tutor 

Once you gain plenty of trading experience and qualifications under your belt, teaching forex online is something to consider as there are always people seeking to learn more and wanting to improve on their trading activities. 

For example, inside the Udemy teaching platform, we can already see many Forex tutors offering various topics in this niche. Students just need to pay a fee and they will get immediate access to the courses as well as downloadable learning materials. 

Udemy is a great entry point for teaching any subject due to the high number of online traffic to the site and the amount of on-going promotion. In exchange, they do take a small cut of revenue share from the sales of your course. 

If you want to make a bigger profit from teaching, then I would recommend creating your own course through platforms like Teachable and sell through your own site. In fact, it’s possible to become a Forex tutor AND an affiliate marketer at the same time if you truly trade currency for a living. 

5 – Forex MLM 

Yes, you read that right. There actually exists an MLM component inside Forex that lets you earn from selling AND recruiting. The products aren’t associated with brokerage services but more on providing tools and education to assist people in their trading activities. 

Like most network companies, each has its own negative feedback from users due to the lack of transparency and monthly membership commitment that don’t offer as much product values as expected. Some are also considered illegal operations in certain countries. 

iMarketsLive and Quest Markets are two companies that use MLM to make money with Forex. There are massive online reviews outlining the efficacy of their business and if you are still interested to join, proceed with caution. 

So, Is Forex Trading Profitable? 

The short answer is yes. It’s certainly not a scam and all of its economics can be viewed in real-time. However, it’s not easy either because exchange rates fluctuate frequently according to the changes in the global markets. 

Those who have a knack for speculating price movements will convince you it’s a rewarding career, but others will warn that you need to have a gut of steels to make profits in the long term. Since losing money is inevitable, this form of trading may not be everyone’s cup of tea. 

With good education and constant practice (on a demo account that is), trading Forex can become less of a daunting task and more of a calculated investment strategy. So consider starting with that first. 

There are other ways to make money online if you feel jittery about the whole trading thing. One that is less risky and more suited to your own level of knowledge and scope of interest. Find out from my recommended training platform how you can get started by simply creating a blog and I shall guide you from there.