Although retail traders make up about 10% of the forex market, about 27 % of retail traders are aged between 18–34. Many traders within that age typically combine other activities with trading. Perhaps you’re a student pursuing a finance degree and thinking of starting a side business. Maybe you’re thinking of a full-time career as a trader. Is it possible? Yes!
The idea of forex trading as a finance student sounds like a great match, and it is! Trading the forex market as a finance student opens a window of benefits you can enjoy across other areas of life. This article explores some key benefits.
Practical application of theoretical knowledge
Finance as a field of study encompasses aspects of economics, calculations, and several other fields that are useful in forex trading. For example, finance students learn financial analysis, planning, accounting, and management control. These are crucial skills needed to become a successful forex trader. You can bring your theoretical knowledge of finance to the forex market and gradually build your trading skills.
Although you have to go through the learning process, you have the added advantage of learning financial analysis and concepts such as cash flow, demand, and supply and how economic policies impact forex trading. You can actually do this from your first year at school and gradually build your knowledge.
Flexibility
Forex trading provides students with a low-startup investment vehicle to build finances right from college. As a finance student trading forex, you can leverage your financial planning skills to create a diversified investment portfolio. You can start investing in college while learning to make important financial decisions.
Forex trading also provides a way to hedge your funds in periods of inflation and uncertain economic events. This is useful, especially if your county’s currency is weaker than the USD and other major currencies in the forex market. By leveraging the forex market to buy and hold foreign currencies, you could preserve the value of your funds for future use.
For example, experts are discussing how the new BRICS agreement may impact the forex market. As a trader, you can make decisions to buy or sell the impacted currencies to hedge your funds.
Networking opportunities
Retail forex traders tend to join online communities where they share ideas and interact with other traders. Traders may also have physical forums where they meet periodically. Joining a forex trading community grants access to a network of traders with similar goals to become better traders. Networking opportunities abound and could be the key difference in developing your trading skills.
As a finance student trading forex, interacting with others and sharing knowledge could also improve your academic performance.
Enhancing your analytical skills
Technical and fundamental analysis are the basic skills needed to trade forex. A good market analyst can find the right entry and exit points, note minute but crucial details, and identify patterns in a chaotic market. This is why a finance student can be a natural regarding forex technical and fundamental analyses. The main point is to hone your analytical skills to make better trading decisions.
As a finance student, you can start honing your analytical skills right from the classroom and then spend time pouring over historical market data, charts, and events to find patterns that shape the market prices of currencies.
Potential for high income
If you’re searching for income-generating opportunities, the forex market offers a low-entry barrier option. You can register with a reputable broker, using amounts as low as $10 or $20 to fund your account and start trading that same day.
One amazing fact is that the forex market has the potential to make massive profits, thanks to the volatility of currencies. Some trading instruments may move by up to 100 pips within a trading day!
Forex trading is becoming popular among younger people because of the potential for success and the value that traders stand to gain. You also can take advantage of the forex market to hit your goals.
A career in investment banking
As a finance student, you have opportunities to work across various industries in different capacities. You probably have a defined career path, but consider a career as an investment banker.
Your analytical skills and financial knowledge about living could help you succeed as a potential investment banker. Another option is working as a portfolio manager or a broker for investors. You may need advanced courses such as an MBA to improve in these careers.
Forex trading gives you the flexibility to work in the investment banking industry or to set up as an independent trader.
How to trade Forex as a finance student
Thanks to modern technologies, forex trading is accessible to all who have a smartphone and internet connection. There are few restrictions to trade in forex as most countries allow their citizens the freedom to do so. Here are steps to follow if you’d like to start trading forex as a finance student:
- Learn to trade: trading requires skills that take time to perfect; you may need to spend up to six months learning to analyze the market and identify profitable trading setups. Fortunately, you can combine these with your academics as they are in the same field. Remember, don’t skip any part of learning forex!
- Register with a reputable broker: find one that offers the best trading conditions and perks, such as student trading accounts. It is important to start with a small amount of capital and gradually grow your trading account.
- Take profits and grow. You can become profitable as your trading skills improve. Be sure to lock in your profits and regularly take funds out to invest in other things.
Take the leap today and start trading forex!