How to trade Forex pairs at home effectively?

Developments in modern technology, personal computers and high speed internet has made it possible for brokers to offer multiple assets to retail traders. Previously trading was mainly done by being physically present on exchange market floors or by calling your broker to place the orders on your behalf. At the present time, financial investing and speculating on asset prices have become increasingly popular and widely accessible for everyday people. Some brokers are even offering 1 USD initial deposits to enable traders to open live trading accounts. Registration and account opening takes less than a day in most cases and the information is easily accessible.

Benefits of trading from home

The obvious benefits of trading from your home is that you are not spending any time on the road to work. You get to save time, energy and money.

The second benefit is that you don’t have to work when you do not feel well or are not in the mood. This can also count as a drawback for some. But keep in mind that being focused can help you make better trading decisions and mood has a lot to do with it.

Retail traders are usually trading their own funds and there’s no pressure from managers and supervisors. Basically trading from your home is like owning a business and comes with all the negatives and the benefits associated with it.

Learning phase is pretty intensive as there’s a lot of information to digest at first, but once you have a profitable trading system and know the business thoroughly, you’ll find yourself having more and more free time to do other things as well. And it is highly recommended that you do so to keep yourself from boredom and overtrading.

Drawbacks of trading from home

On the downside, trading from home can be dangerous when you’re ill prepared. As already mentioned, retail trading using your own money feels very similar to running your own business. And when running a business, you are not dependent on your paycheck. There might be months when your trading balance experiences drawdowns, and when it happens, you should have an emergency fund ready to counter.

Another drawback of trading from your home might be the loss of focus. Although this might not happen to everyone, it’s important to take measures to make sure that your home office helps you focus on your trading. Our homes are filled with books, toys, pets, and appliances that can easily steal time from trading.

Furthermore, in some cases, your family member might become the biggest obstacle for trading from home. Especially when this family member genuinely cares about you while at the same time feeling skeptical about trading. It’s no wonder that many people believe that financial trading is gambling, and rightfully so, most Forex traders blow up their accounts on the first try. On the other hand, there are traders who manage to consistently profit and turn trading into their careers. Understanding the game before you start trading can save you from repeating the other traders’ mistakes.

How to learn Forex trading at home

Learning how to trade from home is not an easy task. However, the process is becoming increasingly easier due to the technical improvements and an increase in the amount of quality information available.

For starters, it’s important to learn what Forex trading is. How prices are created and how brokers are operating. Secondly, beginner traders should fully understand and get used to the trading platforms that they’re going to use. Most brokers are providing traders with all the information needed on how to download and use their trading platforms.

Moreover, you can easily find books, articles, and guides like this one that will help you advance. The best approach is to read, watch and listen to everything you can get your hand on about trading, make your own ideas and plan your trading journey.

It’s important to learn how to use technical indicators, what they are, and how they are used. The biggest mistake novice traders make when using indicators is that they follow them blindly and forget that indicators are meant to be used in context. Even if you are going to be completely ignoring technical analysis, learning about indicators, chart patterns, candlestick patterns, and support and resistance levels can help you find the best entry and exit points. Many traders that are basing their analysis solely on fundamentals such as political and economical news, use technical knowledge to place orders.

Once you learn about the technical details: how to use the trading platforms, how to analyze the markets and make predictions, you will get face to face with another challenge called human emotions. Beginner traders fail because they do not know how to trade. Professional traders fail because they fail to manage their emotions. Fear, hope, revenge trading, greed and boredom can ruin your trading balance. Once you lose the money, it’s not clear how long it will take to start trading again.

The first thing you should do when losing is to figure out what goes wrong. Is it the trading system, failure to manage risks or failure to manage your emotions? Keep in mind that in trading losing is a part of the game. The key is to have an edge on your side. If you can’t take the losses and think about trading as a business and not as a job that pays steady paychecks at the end of every month, maybe trading is not for you.

Boredom can be a great challenge when trading from home. Retail trading can get very lonely sometimes, especially when your job is right in your bedroom and you rarely go out. Trading is the perfect activity for an introvert. However, socializing is important.

There’s one more way how boredom can negatively affect your trading. Let’s say you have developed a perfect strategy and are waiting for the opportunity to present itself to execute the trade, and the market doesn’t give you that opportunity today. The next day the opportunity is still missing. So, what do you do? Do you place an unplanned order or keep waiting? Boredom can make you overtrade and waste away your profits.

To keep yourself away from overtrading, it’s nice to have a side business. That way you will have something to spend your time on when the market is not giving you good trading opportunities and at the same time, reduce the pressure and your financial dependency on trading results.

How to effectively trade from your home

There are a couple of things that will help you prepare better for trading from home. The first and foremost is your home office. Make sure you are the least distracted when trading. A large computer screen for conducting any type of analysis is a must.

Many traders underestimate large screens. Screens can make a trader’s life much easier. Scanning the markets and spotting trading opportunities gets instantly better.

In Forex trading mobile apps play an important role as well. They keep you close to the markets anywhere you go and help you manage your orders in an emergency situation. What happens when you have just opened an order, failed to place Stop Loss and Take Profit targets on time and the internet goes down or there’s an emergency power outage or your computer breaks down? Your mobile phone will come as a rescue in these cases.

After the home office is ready, the next thing is to educate yourself using any resource you get your hands on. Keep in mind that there is a lot of misleading and low quality information on the internet. The key is to learn as much as you can until you are able to tell high quality from low quality one. There’s no other way around it. Learning how to trade is hard work. And it doesn’t end there. Markets are dynamic, there’s always something new to learn if you want to stay ahead of the competition.

It’s vital to create a trading strategy that fits your personality. Each trader is different, some are trading fundamentals, some technicals, some use algorithms and copy trade, some trade frequently while others prefer long term position trading. Consistently successful traders plan their trades and trade their plans and you should do the same to replicate the success.

Your trading strategy should include which asset to trade, what time frame to trade, what setup to trade, reasons for entry, reasons for exit, take profit plan and risk management. It’s also nice to have a journal where you can explain your decisions so you can learn from your mistakes if something goes wrong. It’s recommended to demo test or live test your trading strategies using a small amount of money before risking larger funds.

One more thing to consider when preparing for becoming a retail trader is your work and life balance. Trading needs to become an integral part of your life. Make sure you have family time and work time balanced well.

The main takeaways

To sum everything up, it’s safe to say that trading from home comes with certain benefits: no time, energy and money gets wasted on the road to work, you are your own boss and get to decide when to take a day off. However, there can be some drawbacks as well. The main drawback is that the risks are totally yours. You can kiss and goodbye a steady paycheck as trading is more like a business. Another downside of trading from home is that you might get lonely and bored, which might result in overtrading and wasting away your trading balance. To prevent yourself from overtrading, it’s best to have side endeavors.

In order to fully prepare for trading from home, make sure your home office will not distract you from the work, purchase a nice desktop that will enable you to conduct market analysis and develop your trading strategy.

Trading from home can be difficult but many people do manage to turn it into a steady and reliable source of income. With the right attitude, there’s no reason why you can’t do the same.

FAQs on the trading from home in Forex

Is Trading From Home A Good Idea?

It depends. If your fiance believes that trading is gambling, you have 9 kids and 5 pets that destroy your ability to focus on trading, then trading is a bad idea for you. If you can manage to create a decent environment, develop a trading strategy, dedicate your time, money and energy to trading, it can become a source of income for you.

How can I learn to trade at home?

There is a wide variety of educational content available on the internet. In fact, you are reading one of those contents right now. Most brokers provide their clients with all the tools necessary to master the use of trading platforms. Once you learn how to use the tools, conduct technical and fundamental analysis, you should start working on your psychology and become disciplined. It’s wise to read, watch and listen to trading related content as much as you can until you’ll be able to tell high quality content from the low one.

What are the benefits of trading from home office?

There are a couple of benefits of trading financial instruments from home:

• There’s no money, time and energy spent on the way to work when you are working from your house.
• When you are trading your own funds from home you do not have a manager that supervises your work and can take as many days off as you’d like.
• You can work from home when you feel like it.
• You get enough free time to take on other endeavors as well.

What are the drawbacks of trading from home office?

Some of the drawbacks of trading from your home include following:

• You are taking all the risks as you would in any other business.
• In some cases family members, pets and the environment can become distracting.
• Retail traders that are trading from home can feel bored and lonely sometimes. It’s important to socialize and take on other endeavors as well to save yourself from overtrading.
• Trading can require a lot of upfront costs and you should also be prepared for drawdown periods by creating an emergency fund.