The Forex market is fast paced and flexible and is the biggest financial market in the world, with trillions of dollars changing hands every single day.
It’s popular for traders who want to avoid the complex web of middle men and paying commission, an accessible way to build up investments in currency and a natural way for small businesses to look to invest their cash.
But it’s not without risk. The fact that the market is ever-changing might well mean that it offers up opportunities to make good money, but it does also pose a problem if you go into this without your eyes open and face the prospect of losing out.
If you want the benefits to be had from online FX trades without the pitfalls then here’s three sustainable strategies that should help your small business to succeed…
Dabble with a demo
Not quite sure if you’re ready to jump in at the deep end? It is possible to set up a demo account to test your techniques and theories. This is essential for any small business. Sign up to one of these but treat the demo period as though your own money is on the line and over the course of a month or so you’ll get a feel for whether your instincts are right and whether you are ready to make money. It’s also handy to help get a feel for the technology involved and the way in which markets can be tracked and analysed.
Stop and limit orders
A sustainable strategy needs effective management and that’s where stop and limit orders come in, putting a break on any potential losses to keep this more manageable.
These are readily used in the stock market and are equally useful tools when it comes to Forex trading. Limit orders, as the name suggests, allows investors to set minimum and maximum limits to buy and sell while stop orders involve specifying an exact price at which to do business.
Small businesses could set a limit order ahead of the current market value to know when to cash in with a stop in place below that value to limit potential losses. It can be tricky to get these right but equally these can help ensure that this is a carefully controlled part of your investment portfolio.
Long term view
That last point also hints at another strategy that small businesses ought to adopt – the long term view.
Given that small businesses are unlikely to be awash with cash, it’s important to be patient. Accept that you won’t be raking in millions in minutes, and that you’ll need to learn how the market will react to economic and political events across the globe.
Even more experienced traders can get sucked in to overleveraging and overtrading. Set out a plan and stick to it – preferably after studying the signs of reliable high timeframe charts - with the sort of discipline you show in the rest of your business operations. Never invest more than you are comfortable with and never allow yourself to get caught up in the heat of the moment – it’s not a game it’s an important financial investment.