For some, Forex trading is actually a full time business – and one that can truly make someone rich. Basically, if you’re trading with the best forex brokers and manage your risks and your capital properly, you can make a true business out of Forex trading.
One of the main and most important arguments to support this claim is the fact that one must treat trading as seriously a business regardless of what it actually is to you. Even if you’re a beginner trader, you must still look at Forex trading as you’d look at a business that can go bankrupt!
It Provides Free Leverage
Anyone who would try to borrow tens or hundreds of thousands of dollars without a clean track record or proof of past reliability would probably not be very successful. The same applies to businesses. One may have minimal capital and some basic ideas, but no one will fund them right 0ff the bat without some convincing.
Forex trading can be considered a business because it provides leverage. It acts like an already established and reputed business and allows you, the trader, to massively increase your borrowing power. However, increased borrowing power translates to major financial risks – so be careful!
Decreased Downside Risk
Both traditional businesses and Forex trading come with downside risk. This means that you stand to lose what you have invested and, in some cases, even go into debt.
Luckily, Forex trading comes with significantly decreased downside risk. In fact, it comes with one of the best downside risk characteristics in the market. Namely, traders can’t lose more than what they have invested, unless they make some really bad decisions.
Forex trading is considered by many to be the perfect business. Well, the following is one of the main reasons why this is.
Unlike with the usual brick & mortar businesses, Forex trading has enough room for flexibility. If you don’t like a certain currency pair or feel like its profitability has run out, you can simply change your niche, so to speak.
Obviously, you can’t do the same with an actual business. Moreover, you can even change your broker if you find that you really don’t like something. Then, after a quick search of the top forex brokers online, you can get back in the business.
No Inventory/Staff, No Problem
Some people love to manage staff and inventory – but others really don’t enjoy that side of business. The latter can just join the world of Forex trading and start their trading business, and forget about having to deal with inventory and staff – forever.
This also means that there will be no paychecks to hand out nor any issues related to inventory or HR. The only product or equipment that a trader has to manage is their computer, laptop, or the smartphone that they trade from.
The Bottom Line
As you can see, there are quite a couple of reasons why Forex can be considered not only a true business but the best business model out there. It provides leverage, flexibility, less risk overall, as well as scalability.
Ultimately, the best thing about trading, in general, is the fact that it will never die. No matter the age or trends, trading will always be one of the main actions that move the markets around the world.